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Hogan says $16.4B plan has limited growth, but still provides record K-12 funding

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ANNAPOLIS, Maryland — Gov. Larry Hogan outlined a balanced budget plan on Thursday that makes a substantial cut to funding for jurisdictions where education costs more, but the new governor said the plan still provides record spending on K-12 education.

Some lawmakers, though, said many questions remain about the budget plan for the next fiscal year, because some cuts have not been specifically defined.

Hogan, a Republican who just took office on Wednesday, sketched out a basic outline of his budget proposal at a heavily attended news conference. Overall, he said the $16.4 billion operating budget closes a $750 million deficit without new taxes, job cuts or furloughs of state employees. It also includes about $290 million for school construction.

"Our budget slows overall spending growth, but we continue to fund important projects and programs at appropriate levels, including education," Hogan said.

Hogan campaigned on bringing greater fiscal restraint to state government. He also said he would push this year for tax cuts, which he said would be discussed later.

One budget cut that is getting a lot of attention was made to funds that have been directed to jurisdictions where education is more expensive. The Geographical Cost of Education Index steers money to more populated areas in the state such as Montgomery and Prince George's counties and the city of Baltimore. The $136 million budget item is being cut in half — saving roughly $68 million.

Del. Maggie McIntosh, the chair of the House Appropriations Committee, said she has a lot of questions about how the overall budget plan would affect state employees, health care and K-12 education in all counties.

Hogan's plan would reduce rates paid to Medicaid healthcare providers to fiscal year 2014 levels, which would save about $160 million. The plan also calls for state employee compensation adjustments to save $156 million.

"You obviously can tell that I think there's a lot of work to be done on this budget," McIntosh, a Baltimore Democrat, said.

Senate President Thomas V. Mike Miller, D-Calvert, said the proposal isn't as bad as some had feared.

"He did balance the budget, but again if you don't have new revenues and all you're doing is cuts, something has to be cut, so everybody has their own pet hobbyhorse, and there's going to be advocates screaming — whether it's in terms of Medicaid, whether it's state employees, whether its K through 12 or what have you, everything is getting cut to a certain extent, but in terms of priorities — in terms of our priorities — he recognized them, and he dealt with them and the cuts weren't as severe as could have been."

David Brinkley, Hogan's budget secretary, said even with the cut to the GCEI, the state is still making a record investment in K-12 education. The budget also increases funding for higher education by 1.3 percent, the Hogan administration says.

Brinkley said the budget plan calls for a 2 percent reduction to all state agencies in the next fiscal year. That would save about $118 million.

Supporters of two large light-rail projects also have been concerned. Hogan included money for both the Purple Line — a planned 16-mile light-rail line in Montgomery and Prince George's County — and the Red Line, an east-west public transit line in Baltimore. However, the administration has not made a final decision about whether to proceed with either project.

"We want to do a thorough review of both projects before making any decisions," Hogan said.

The budget also contains $30 million for a new hospital system in Prince George's County.

Hogan's budget outline came a day before the actual budget plan will be submitted to the General Assembly. Lawmakers will spend much of the session working on details.

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