Averting the Doomsday Budget Cuts

Today the Maryland General Assembly concluded a three-day special legislative session, in which we averted radical funding cuts that would have severely hurt Montgomery County and the entire state. 

As you may recall, in the final hours of the regular legislative session in April, parts of the budget package failed to win passage before the legislature was constitutionally required to adjourn. Had we not acted, this would have triggered the so-called “doomsday budget”—a budget predicated upon devastating cuts to education, jobs, and services for those who most need them. The effect of those cuts would have been a body blow to Montgomery County’s students, seniors, and those in greatest need of services.

Hubert Humphrey captured the essence of the legislature’s dilemma, when he said that “the moral test of government is how that government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped.”

Today was just such a test. For now, I believe that our state government has passed.

Prudently called into a special session by the governor, the General Assembly worked out a delicate compromise to halt the doomsday cuts. This compromise encompassed hundreds of millions of dollars in spending cuts and adds new revenues that will balance our budget and continue on the path toward eliminating Maryland’s long-term structural deficit.

In the end, the choice presented to lawmakers was no choice at all. We had to take immediate action to protect our communities before it was too late. Had we done nothing, the doomsday scenario would have gone into effect.

We protected nearly $33 million for Montgomery County Public Schools to keep them the best in the nation. We curbed 10 percent tuition hikes at the University of Maryland and saved critical funding for Montgomery College so that our children receive the education they need to enter the 21st century workforce. We saved the Biotechnology Tax Credit, which has leveraged $6 million in investments in Rockville and around Montgomery County and catalyzed our innovation-based economy.

To do this, the General Assembly first decreased state spending by over $227 million. Next, it eliminated a number of tax credits and incorporated a provision that I authored, which will close a significant loophole in Maryland's tax code that permits a certain type of trust fund to be used as a tax shelter to avoid state income taxes. The Baltimore Sun recently hailed my provision in an editorial, and The Gazette characterized it as attempting “almost the impossible in government—rais[ing] revenues without raising tax rates.” At a time when we are making painful cuts to the State budget, we must be serious about eliminating special-interest tax giveaways that do not help our communities. I am glad we succeeded in that today.

Finally, as you may know, the Assembly raised the rates on tax brackets for the top 14 percent of Maryland earners. I understand that this means, for example, a joint filer reporting $175,000 in federally adjusted gross income would pay $2.44 more per week in state income tax. 

All throughout the process I worked with my colleagues to advocate for a fair deal for our community and our state. While I believe that there were other approaches that would have been better comprehensive long-term solutions, I am relieved that the Assembly has rejected the doomsday budget and instead passed one that better protects our children, our seniors, and those who are in greatest need of services.

Please let me know if there is anything with which I can be helpful. It is a pleasure to fight for our community’s priorities in Annapolis.

This article is cross-posted at SamArora.com.