Maryland will start cutting millions from the state budget next week to cope with increased expenses and reduced tax revenue due to the coronavirus pandemic.
A total of $120 million is on the chopping block, including a $35 million cut to how much the state pays toward the Washington-area Metro system.
The budget cuts are expected to be the first of several to happen in coming months as the state deals with the financial fallout of lost jobs and reduced spending. By the end of the current budget year on June 30, the state expects to collect between $925 million and $1.125 billion less in taxes than expected.
Further losses are expected for the next budget year that starts July 1.
The state Board of Public Works — comprised of the governor, comptroller and treasurer — will meet Wednesday to consider the proposed cuts. Lt. Gov. Boyd Rutherford has filled in for Gov. Larry Hogan at the board’s meetings since March as the governor focuses on the state’s response to the outbreak.
The board has the ability to reduce spending by up to 25%, and the first round of cuts includes:
$62 million toward construction projects at the University of Maryland, Eastern Shore’s pharmacy school and for a new academic building at a University System of Maryland center in St. Mary’s County.
$35 million of the state’s contribution to the Washington Metropolitan Area Transit Authority.
$7 million in tax credits for renovating “heritage” buildings.
$7.6 million in school safety grants.
$4.225 million in neighborhood revitalization programs in the Baltimore region.
$2.97 million in community college facilities grants.
$1 million in tax credits from the state Department of Assessments and Taxation.
$775,000 for demolishing vacant buildings.
$270,000 in “excess funds” for hazardous waste cleanup.
The Hogan administration said in a statement that it targeted money for projects that hadn’t been spent yet or weren’t designated for specific projects. These are expected to be the only cuts for the current budget year.
The leader of the largest union for state employees was relieved that the cuts didn’t include any employee layoffs or furloughs.
But Patrick Moran, president of AFSCME Maryland Council 3, questioned why the state is continuing to spend money on non-emergency priorities, such as buying land for conservation, while cutting funding to public transportation that people need to get to essential jobs.
WMATA is “essential to the functioning of Maryland. It’s essential to commerce. It’s essential to the economy,” Moran said. “I don’t understand the reasoning for that.”
Even as the state is making moves to reduce spending in some areas, the costs of responding to the pandemic also are beginning to pile up.
Dozens of emergency contracts worth hundreds of millions of dollars have been signed in the past two months, and they’re starting to make their way to the Board of Public Works for review.
The state is proposing to pay more than $3.2 million extra per month to the private company that provides medical care to inmates in state prisons.
Corizon Health Inc. of Brentwood, Tenn., could be paid up to $29 million more over six months for staff, overtime, protective gear and testing under the revised contract. The state already is paying Corizon $680 million over five years to take care of inmates’ medical needs.
Another contract up for approval is a $700,000 per month agreement with Procare Ambulance of Maryland, which has been hired for a “24/7 ambulance strike team” to transport coronavirus patients.
The state hired Rosedale-based Procare after realizing it needed more ambulances on call when an emerging outbreak at the Pleasant View Nursing Home in Mount Airy meant 20 residents needed to be taken to a hospital in one day, overwhelming local resources.
Pleasant View experienced one of the first and most severe coronavirus outbreaks in the state’s nursing homes, with more than 100 cases and 29 deaths among residents and staff.
Over six months, the ambulance company could be paid a total of $4.2 million, which would come from federal coronavirus aid that the state received.
