The biggest portion of the reductions outlined Friday come from $264 million in Medicaid funds for hospitals. The governor also is shifting $60 million in revenues from the state's transportation trust fund. The proposal also includes $52 million in reductions to local governments.
The governor's budget proposal to the Maryland General Assembly does not include any tax increases.
O'Malley also is proposing changes to address $35 billion in unfunded pension and health liabilities. With increased contributions from employees and the state, O'Malley said Maryland's pension system would be funded at 80 percent by 2023.
For the first time in three years, state employees won't have to take furloughs. The new budget will also focus on job creation initiatives.