O'Malley Outlines Nearly $1 Billion In Cuts

Maryland Gov. Martin O'Malley outlined nearly $1 billion in state spending cuts on Friday, including a proposal that will cost hospitals about $264 million to fill a gap in Medicaid and a start on the daunting unfunded liabilities in the state's pension system.

The governor's budget-balancing plan includes about $285 million in spending transfers. The state will save an estimated $94 million by level funding K-12 education aid, which totals $5.7 billion. Tuition will rise by 3 percent at Maryland's public colleges and universities for the second year in a row after a four-year freeze. Reforms to state retirement plans are expected to save about $104 million.

"It won't be the last word in this budget," O'Malley said, adding that lawmakers and citizens will review and discuss it, and "we all need to stay at the table."

Jim Reiter, a spokesman for the Maryland Hospital Association, said hospitals are concerned about the big cuts to hospitals, especially after medical providers already have weathered three years of cuts.

"When you keep cutting, you can only cut so much until you hit bone," Reiter said. He said he was unsure how the cut would play out.

The governor has decided to protect the state's defined benefit pension system for public employees and not move toward 401K-type plans. O'Malley also has resisted calls from some lawmakers to begin shifting some pension costs to local governments, citing tough local budget conditions as the main reason.

"They couldn't do it, as a practical matter," O'Malley said.

The budget continues last year's deep cuts to money for local governments to use on road repairs. Local governments have to pay for their share of the cost of the property tax assessment office, which adds up to about $35 million.

Read more at the Washington Examiner