ANNAPOLIS, Md. — Maryland Gov. Larry Hogan’s administration will bring tens of millions of dollars in mid-year budget cuts to a state board next week, his budget chief said Thursday.
The actions are being taken to start addressing an estimated $742 million shortfall in the next fiscal year, said David Brinkley, the governor’s budget secretary.
The shortfall is not unexpected. State budget analysts projected it in a report earlier this summer.
“We’re trying to get ahead of something we know is coming forward, and I think responsibly doing so,” Brinkley said.
A total of $86.3 million in total savings will be brought to the Board of Public Works, a three-member panel that includes Hogan, Comptroller Peter Franchot and Treasurer Nancy Kopp.
Of the total savings, $67.2 million will come from budget reductions, Brinkley said.
About $22.2 million of the cuts will come from the health department. Part of that will result from decreased average length of hospital stays, saving an estimated $10 million. About $5 million will be saved from renegotiating certain large state contract renewals, Brinkley said, and another $5 million will come from extra balance in the Cigarette Restitution Fund to offset Medicaid costs.
The university system will see $8 million in reductions, including cuts to administrative expenses and 30 vacant positions, Brinkley said.
Other reductions will come from cutting vacant positions in state agencies, Brinkley said.
Over the past decade, it hasn’t been unusual for Maryland’s governor to bring mid-year cuts to the board to help get a jump on the next year’s budget work. Brinkley noted that bond-rating agencies often positively cite the board’s unusual ability to take some budget-balancing actions when the legislature isn’t in session.
When state lawmakers convene for their annual legislative session in January, they generally face a budget gap when they begin work on balancing the budget for the next fiscal year. That’s partly due to unforeseen costs that arise during the year — after lawmakers have already passed the year’s spending plan months ahead of the fiscal year’s start on July 1. However, the Republican governor also has been critical of spending mandates put into the law by the legislature, which is controlled by Democrats.
“The governor has tried and he is going to keep pounding away at the message that these mandates are driving this structural gap,” Brinkley said.