A recession session
2010 General Assembly will focus on budget gaps, not campaign maps, lawmakers say
When lawmakers return to Annapolis on Wednesday, they will face a $2 billion gorilla in the State House.
The challenge of taming the projected deficit after Gov. Martin O'Malley submits his budget proposal later this month will fall largely to three fiscal committees. But the effects of budget shortfalls that have dominated O'Malley's first three years will be far-reaching.
And the deficit will be joined this year in the spotlight by election-year dynamics that could color what does and does not get done during the 427th session of the Maryland General Assembly.
"Normally, during an election year you really like to be able to do some things that are tangible, that people can see where their tax dollars are going, where they can see the fruits of their contributions," House Economic Matters Committee Chairman Dereck E. Davis said. "But unfortunately, we're going to be making a lot of cuts."
A legislative spending panel recently urged O'Malley (D) to hold the line on spending for the fiscal year that begins July 1 the first time such a request has been made in the committee's 27-year history.
Last month, House Speaker Michael E. Busch told a Democratic caucus meeting that any legislation with a price tag exceeding $100,000 will have to be approved by legislative leaders and the House Appropriations Committee.
"We're not going to entertain bills that cost money without a funding source," said Senate President Thomas V. Mike Miller Jr. (D-Dist. 27) of Chesapeake Beach. "You've got to pay to play. If you want to spend money, then you better come up with a way to fund it."
With dollars in short supply, lawmakers hope to make progress in areas where the budget is not such a major factor.
The legislature's two crime and punishment committees will likely take up bills related to gang prosecution, fingerprint evidence in capital cases and tightening laws against child sex predators, Miller said.
Politics will be part of the script, especially with the gubernatorial election looming in the fall.
The spending guidelines passed last month would force lawmakers to find a way of trimming hundreds of millions from O'Malley's budget on top of fiscal 2010 midyear cuts, said Busch (D-Dist. 30) of Annapolis.
The $4.1 billion in federal stimulus dollars that Maryland is receiving over three years comes with strings that prevent the state from cutting from education and other programs that are supported by the aid.
"That leaves a lot of pressure on the health care budget," Busch said.
That is not likely to change, as lawmakers will likely be forced to find savings in the health department's budget by reducing Medicaid reimbursement payment rates, he said.
Despite the budget difficulties, job creation efforts cannot be disregarded, said House Minority Leader Anthony J. O'Donnell (R-Dist. 29C) of Lusby.
"We should not be pushing businesses out of this state. We should be encouraging businesses to flourish," he said.
The legislature will consider tax credits to help businesses, but not new taxes, Busch said.
A 10-cent-per-drink alcohol tax that advocates have pushed as a revenue stream for a variety of health programs, including Medicaid expansion, mental health and services to the developmentally disabled, is unlikely to pass, he said.
Lawmakers are more likely to continue to look to the federal government to fill gaps, including grants to states that find innovative ways to increase student achievement under the Race to the Top program.
Pursuing the $4.35 billion in competitive grants would likely force lawmakers to broach the sensitive subject of teacher tenure, which many consider a hurdle to ousting ineffective teachers.
Another aspect of education spending, the so-called maintenance of effort law that requires school systems to spend at least the same amount per pupil as the previous year, will be a big issue for lawmakers, Busch said.
Legislators will debate the criteria for granting a waiver from the requirement in times of economic hardship after Montgomery, Prince George's and Wicomico counties were denied such waivers from the state Board of Education last year.
Lawmakers could amend the maintenance requirement in exchange for the counties taking on teacher pension costs, Miller said. Those costs now are paid in full by the state. Miller supports shifting at least some of the cost to local governments.
On the economic front, unemployment insurance rates, which have tripled in recent months to replenish a state trust fund depleted by rising claims, will get considerable attention.
With businesses struggling to pay the rising rates, the state needs to ensure workers receive the benefits and "by the same token make sure businesses are able to meet their obligations without being unduly burdened," said Davis (D-Dist. 25) of Upper Marlboro, whose House Economic Matters Committee will take up the issue.
Foreclosures, including an O'Malley-backed bill mandating mediation between homeowners and lenders, will continue to be a timely issue, Davis said.
And legislation to allow direct wine shipping could prove to be the "sleeper issue" for the committee, Davis said.
Electricity re-regulation, which commanded the attention of the Senate Finance and House Economic Matters committees last year, is unlikely to dominate this year. O'Malley introduced a re-regulation bill midway through last year's session, but appears to have backed away from the legislation after meeting stiff resistance in the House.
Re-regulation proponents face the same uphill climb this year, Davis said.
"Clearly the onus, the burden of proof if you will, is going to be on the bill sponsor to show us unequivocally that we should change course and go in a different direction," said Davis, who expects O'Malley to instead focus on adding solar energy to the state's renewable energy portfolio.
Davis and his committee have spent the interim meeting with alternative energy providers and utilities to find ways to make the electricity market more competitive.
He is considering legislation that would make utility customer lists available to energy retailers looking to "target customers and aggressively market their product," he said.