FY11 BUDGET, CLOSES $2 BILLION DEFICIT

GOVERNOR MARTIN O’MALLEY OUTLINES FY11 BUDGET, CLOSES $2 BILLION DEFICIT AND PROTECTS KEY PRIORITIES

Proposed budget represents fourth straight year within spending affordability guidelines;
Second consecutive budget to propose negative affordability growth

ANNAPOLIS, MD – Governor Martin O’Malley, joined today by Lieutenant Governor Anthony Brown and Secretary T. Eloise Foster of the Maryland Department of Budget and Management, outlined the FY 2011 budget for the State of Maryland, maintaining fiscal responsibility by remaining within spending affordability guidelines for the fourth straight year. The FY11 budget brings total reductions under the O’Malley-Brown Administration to $5.6 billion and more than 3,500 state positions.

"These have not been easy times for our country, our State, nor for the hardworking people that we represent, but in the face of some very big challenges we’ve been able to make very important progress,” said Governor O’Malley. “By nearly every objective criteria, Maryland is in a stronger position than other States to recover from this recession even stronger – for an economic renewal that will get us back once again to prosperity."

Every year since taking office, Governor O’Malley has submitted – and the General Assembly has passed – a balanced budget under the spending affordability guidelines, and for the first time in at least 40 years, state General Fund spending is lower now than it was four years ago. In fact, the O’Malley-Brown Administration is the first ever to propose negative affordability growth, and has done so in the last two years. The FY11 budget proposes total spending to decline by $249 million, representing the first time in at least 39 years that total operating budget spending has declined since the previous year.

“Because of the choices we’ve made together, with partners in the General Assembly and across the entire state, we have protected progress, improved our public schools and expanded health care to more Marylanders,” Lt. Governor Brown said. “We share a belief that when the times are bad, we must all do our part to be better so when times get better, we can be the best. Governor O’Malley’s leadership and vision during difficult economic times has made Maryland a better state and I am confident that we will pull through these challenging times together more quickly than other states.”

The proposed FY11 budget protects funding for key priority areas, including public education, job creation, public safety, and environmental protection.
· Continues record funding for the nation’s number one public schools, bringing total funding to a record $5.7 billion;
· $20 million dedicated to the Job Creation and Recovery Tax Credit, encouraging businesses to hire unemployed Marylanders this year;
· $3.2 billion in the capital budget will support more than 20,000 construction jobs during next fiscal year;
· Funding for the Chesapeake Bay 2010 Trust Fund will double over FY10;
· Continue funding for health care coverage for low-income children and adults. Since Governor O’Malley took office, health care coverage has been expanded to more than 200,000 additional Marylanders.

Maryland remains one of only seven states in the nation to maintain a Triple A bond rating, certified by all three credit rating agencies. Maryland’s unemployment rate remains 25 percent lower than the national average, and last year Maryland’s rate of job growth was better than all but two other states. Our state continues to gain jobs in key sectors of our economy, including Computer Systems Design where Maryland experienced the best growth in America last year.

The FY11 budget proposes more than $1 billion in budget reductions, including level funding of most local aid programs, additional state employee compensation actions, and state agency reorganization. More than 3,500 state positions have been eliminated during the O’Malley-Brown Administration, representing a savings of more than $150 million in this budget alone. Maryland state and local governments collectively rank tenth in terms of fewest government employees per capita.

The Governor’s presentation on the FY11 budget is available here.

A briefing document on the FY11 budget key priority areas is available here.

Public Education

Funding for K-12 public education has increased 27 percent under the O’Malley-Brown Administration to a FY11 proposed total of $5.7 billion. School construction funding has increased 52 percent compared to the previous administration.

· The FY11 budget increases direct K-12 funding by $99 million,
· Fully funds teacher and librarian pensions,
· Includes a $2.7 million increase for the SEED School.
· Brings total in-state tuition increases to three percent since FY07, compared to increases of more than 30 percent under the last administration.
o As a result, USM tuition rates decline from sixth highest in the nation to an estimated 21st in FY11.

Job Creation

Governor O’Malley recently announced a public-private partnership at Seagirt Marine Terminal which will generate 5,700 new jobs. Additionally, federal Recovery and Reinvestment funding has allowed Maryland to create or retain more than 14,000 jobs during the first quarter of FY10.

· The proposed FY11 budget includes $20 million for a new Jobs Creation and Recovery Tax Credit, which if fully utilized could bring 6,700 unemployed Marylanders back into the workforce,
· Governor O’Malley proposes reauthorization of the Sustainable Communities Tax Credit ($50 million over three years),
· Proposed capital budget will support more than 20,000 construction jobs,
· Funds for the first time the BRAC Zone Tax Credit at $300,000,
o More than $500 million of capital funding is dedicated to BRAC related infrastructure projects to prepare the State for the arrival of thousands of jobs beginning next fiscal year.

Public Safety

Maryland lost fewer of citizens to homicide than in any year since 1986, including 25 percent fewer juveniles. Our murder rate in 2009 was 26% lower than it was three years ago in 2006, and 11% lower than in 2008.

· Local police aid is funded at $45.4 million in the proposed FY11 budget,
· $20.1 million is allocated for local law enforcement grants,
· Maryland State Police will receive funding for ten additional troopers under the proposed budget
· Funding for juvenile programs such as Operation Safe Kids ($1.3 million) and evidence-based services for juveniles ($7.2 million).

Environmental Protection

Since taking office, the O’Malley-Brown Administration has protected more than 25,700 acres under Program Open Space, compared to less than 4,700 acres under the previous administration. The Governor has been recognized for innovative programs such as GreenPrint and BayStat that provide a new level of transparency to the State’s efforts to improve the quality and health of the Chesapeake Bay.

· The proposed FY11 budget fully funds Program Open Space at $22.7 million for State and $15.3 million for local projects,
· Record funding for the Chesapeake Bay 2010 Trust Fund ($20 million),
· $17.6 million for the Rural Legacy program, which preserves and protects those precious natural resources which are so essential to our quality of life.
· Agricultural land preservation funded at $25.9 million and nearly $14 million for Cover Crop programs, which help reduce dangerous storm water runoff into the Bay.