GOVERNOR MARTIN O’MALLEY BRINGS FY2010 SPENDING REDUCTIONS TO OVER $1 BILLION

Budget actions maintain Triple A bond rating; Protect public education, public safety, and jobs

ANNAPOLIS, MD (November 18, 2009) – Governor Martin O’Malley introduced more than $360 million in budget actions before the Board of Public Works today, bringing total spending reductions for FY2010 thus far to over $1 billion. Today’s actions bring General Fund spending to $500 million less than it was three years ago, as Maryland continues to manage this national recession in a way that maintains the Triple A Bond rating and protects our core priorities of public education, public safety and jobs.

A complete list of budget actions is available here.

A summary of total budget actions is available here.

“These have not been easy decisions, but they have been necessary decisions to balance our State’s budget, and get our state through this recession more quickly and stronger than other states,” said Governor O’Malley. “Our citizens expect and deserve a government that works, and in spite of the most severe recession in a generation we’ve been working to reform our State government to make more efficient and effective.”

In the past three years, the O’Malley-Brown Administration has implemented $4.6 billion in budget cuts and spending reductions, including the elimination of more than 3,300 state positions.

Governor O’Malley once again held public education harmless in this round of budget cuts, noting Maryland’s nationally ranked number one public schools and the need to invest in our schools even in difficult times. General Fund support for K-12 education in FY2010 will exceed FY07 spending by almost $700 million.

Of the FY2010 budget actions, six of every ten dollars have come from reforming state agencies. Among today reductions were efforts to continue reforming our State government to make it more efficient and effective, including the suspension of non-essential vehicle purchases and reducing out-of-state travel for state employees. In addition, the State Highway Administration will reduce operating hours for five of 12 SHA-operated rest areas. An additional rest area will close during the winter months, and the rest area at US 219 at Keyser’s Ridge will close permanently.

Additionally, Governor O’Malley introduced $11 million in savings from efforts to ensure that only people who are eligible for Medicaid receive Medicaid services, and by scaling back unnecessary services; $500,000 in savings from negotiating lower prices with venders; and $3 million in savings from streamlining operations and consolidating functions across our government.

With today’s reductions, the O’Malley-Brown Administration maintains its commitment to fiscal responsibility by preserving the Rainy Day Fund at the mandated five percent of General Fund Revenues. Maryland remains one of only seven states to defend the coveted Triple A bond rating certified by all three bond rating agencies. In reaffirming this top ranked status, Standard & Poor’s wrote in October that Maryland “has proactively responded to [a] recent structural budget imbalance.” And the rating agency Fitch noted that “the state has taken prompt and repeated action to preserve operating balance….”