A Maryland panel approved about $413 million in state budget cuts Wednesday as part of a long-term effort to adjust to the huge financial impact the coronavirus has had on the state’s economy.
The Board of Public Works voted for a scaled-back version of more than $600 million in cuts initially proposed by Gov. Larry Hogan, who is one of three board members along with Comptroller Peter Franchot and Treasurer Nancy Kopp.
About $205 million of the initial cuts — largely affecting state employees — were removed from the proposal after Franchot said he could not support them. The comptroller approved of the revised amount.
Hogan, a Republican, said the cuts across agencies and offices in state government are needed to spare state employee layoffs. He said more cuts will be required to avoid them without more aid to states from the federal government. As chairman of the National Governors Association, Hogan is leading a push for more federal help.
“Now look, people may have to postpone or forgo a raise. Worthwhile programs will not be able to be funded or will get trimmed. Departments won’t see increases, but funding everything and cutting nothing is not an option," Hogan said during a meeting conducted online.
The vote came after Hogan's budget chief gave a grim outlook of future revenue projections. David Brinkley said the state is facing a projected loss of roughly $2 billion in state revenues for the fiscal year that began Wednesday. That balloons to more than $4 billion in the next fiscal year.
“There’s no text book for how you deal with something like that," Brinkley said. "The failure to make difficult choices now will make decisions more difficult in the future.”
For perspective, Brinkley said it took Maryland 77 weeks during the Great Recession before 500,000 unemployment claims were filed. During the pandemic, it only took the state eight weeks to reach that number.
Franchot, a Democrat, criticized the federal government's response so far.
“I agree with you: we should not sugar coat things," Franchot said, referring to the governor's comments on grappling with budget challenges. "There are going to be many, many more cuts, because of the fact that the White House has dropped the ball, unfortunately.”
Kopp, a Democrat, opposed making the cuts at this time. She urged the panel to wait for more budget information coming in two weeks. She said taking more time would enable officials to look at more future options, such as a progressive furlough plan down the road.
“These sort of options we simply haven’t had time to look at, and I think in the interest of bringing everybody together and going together as a state, as we will in the end I believe, we could use this time very efficiently,” Kopp said.
A significant portion of the cuts affect higher education. A total of $131.5 million in spending reductions were approved, including $117 million to the University System of Maryland, which could include employee furloughs.
Senate President Bill Ferguson, a Baltimore Democrat, said the cuts approved Wednesday are a forecast of things to come, if the federal government doesn't do more to help the states.
“The COVID-19 crisis has wreaked havoc on state budgets throughout the country, and we will face more cuts without help,” Ferguson said.
Lance Kilpatrick, the legislative director for the American Federation of State, County and Municipal Employees, said the union hoped a more thoughtful approach would be taken in the future.
“We are pleased that the Board of Public Works has taken a step back from the abyss and hope that more reasoned, thoughtful and strategic approaches will be taken to balance the needs of all Marylanders in this time of pandemic crisis — as opposed to exacerbating an already volatile situation by harming the workforce that’s keeping Maryland together and moving forward.”