O'Malley's budget released

Governor O'Malley released his budget today. Highlights include:

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• The budget totals $37.3 billion, a 4.3% increase.
• The significant increases are in:
• Health ($406 million - mainly federal funds for Medicaid),
• Transportation ($269 million,  but this could change markedly as the legislature considers a transportation finance package),
• K-12 Education ($183 million, all in increased aid to public school systems),
• Universities and colleges ($144 million, of which $90 million is state funding and $54 million is from the institution's own revenue sources).
• $450 million of the increase is in the appropriation  to the State Reserve Fund. The Governor is proposing increasing the "Rainy Day" account in the reserve fund from 5% (where it has remained throughout the recession and its aftermath) to 6%. This is to provide a cushion against possible federal budget cuts.
• The proposed budget does not provide any new revenue for the state's transportation fund. The legislature is expected to consider a separate transportation funding initiative this session.
• At the Governor's budget briefing, state budget Secretary Eloise Foster summarized $325 million in cuts from current services "baseline" funding levels. The cuts are concentrated in Medicaid (with some related to additional federal funding in the Affordable Care Act), and a 2.5% limit in rate increases for health and human service providers, and deferring some payments to a reserve fund for local government income tax revenues.

The General Assembly will now take up the governor's budget. Our knowledgeable readers will remember that the legislature is only allowed to cut the budget in most cases.

Stay tuned for MBTPI's more detailed analysis of the proposed FY 2014 budget in the coming weeks.