ANNAPOLIS — Gov. Larry Hogan’s budget won’t include funding for a downtown Frederick hotel and conference center project when it is unveiled on Wednesday — but that doesn’t mean the project won’t be funded within the next 12 weeks.
Maryland Budget Secretary David Brinkley, a former state senator from Frederick County, confirmed that the money won’t be included in the governor’s proposed budget, though he expects that lawmakers will add it later.
Brinkley spoke just outside Hogan’s press conference on Tuesday morning after the governor gave a broad overview of what can be expected when the multi-volume budget books are released Wednesday.
In the press conference, Hogan touted spending for city revitalization projects elsewhere in the state — Baltimore, Cumberland, Hagerstown and Salisbury — but did not mention Frederick.
Brinkley said the project wasn’t included because the governor’s concern was to keep capital budget spending below $995 million for the foreseeable future and “stop the hemorrhaging.”
On Wednesday, Hogan said payments on the state’s previous debt are the fastest-growing line item in the budget.
“Basically, after years of running up the credit cards, the result is devastating,” Hogan said. “Next year, the state will be forced to spend more on debt service payments than we will be able to spend on school construction, which is completely unacceptable.”
Last year’s capital budget was approved by lawmakers with $995 million in expenditures.
Last year, Hogan introduced an operating budget with $17.209 billion in general fund spending, which represents state revenue from taxes. Lawmakers cut that proposal to $17.205 billion.
However, that spending fell further to about $17.1 billion after the Board of Revenue Estimates approved $82 million in cuts to the current year budget in November.
The fiscal 2018 budget will include $17.1 billion in spending, the governor’s office announced Tuesday.
Hogan said the new budget will represent less spending in fiscal 2018.
The state’s overall budget — when federal money and other special funds are included — is more than $40 billion.
In Maryland, the governor largely shapes the state budget. The General Assembly generally can only cut the governor’s operating budget and cannot increase or rearrange spending categories.
The House and Senate take turns each year reviewing the governor’s budget proposal first. The House of Delegates is considering the spending proposals first this year.
Lawmakers respond to lack of conference center funding
Delegate Kathy Afzali, R-District 4, the chairwoman of the Frederick County delegation, said she was pleased to hear from a News-Post reporter that the conference center project was not funded.
“How many ways can you say it’s dead?” Afzali said of the project. “I’m hoping we’re going to move on. There’s some other budget shortfalls this year and there’s very important things to fund such as education and pension funds. So let’s not take our resources for one developer. Let’s focus on all of Maryland.”
She said Republicans in the delegation — who voted as a bloc against a conference center funding bill last year — don’t oppose the project entirely.
“We just want it to go forward with private money,” she said.
Delegate Carol Krimm, D-District 3A, sits on the House Appropriations Committee and supports public funding for public portions of the project. She will continue to advocate for funding to be added to the coming year’s budget.
“So, we’ll go through the process. There is a prior authorization from last session, so we will go through the process through the budget committees,” she said.
Last year, it was a budget conference committee — the negotiators appointed to reconcile the difference between the House and Senate versions of the budget — that added pre-authorizations of $7.5 million in both fiscal years 2018 and 2019 for the project.
The proposed hotel and conference center property at 200 and 212 E. Patrick St. is owned by a business entity formed by members of the Randall family. The Randall family also owns the parent company of The Frederick News-Post.
Complete numbers to be released Wednesday
While the full rundown of proposed state spending won’t be released until Wednesday, the governor discussed some of his priorities for funding on Tuesday.
The fiscal 2018 operating budget totals $17.1 billion, including a $6.4 billion investment in K-12 education. The budget also funds higher education to cap tuition increases at public universities and colleges at 2 percent and gives a record $256 million in funding to community colleges, about $4 million over the state’s funding formula.
The governor’s office shared a long list of offices that will see increased funding through his budget proposal — such as the Maryland Economic Development Assistance Authority and Fund, the Maryland Small Business Development Financing Authority, the Maryland State Arts Council and Maryland State Police — but did not spell out where the overall decrease in funding would come from.
“There are no serious cuts. Almost every service and everything that was in last year’s budget is increased or level funded,” Hogan said.
Senate President Thomas V. Mike Miller Jr. told reporters after a floor session on Tuesday that the budget does not include pay increases for state employees in fiscal 2018.
Maryland has a projected budget shortfall of about $544 million for the next fiscal year. Hogan was able to avoid more budget pain by using money in the state’s Rainy Day Fund, which now holds more than the targeted 5 percent of the state’s operating budget.
Sen. Richard Madaleno, D-Montgomery, said about $177 million in Rainy Day money is being used to help fill budget holes.
Also on Tuesday, the governor announced two bills focused on spending reforms.
The Common Sense Spending Act of 2017 would allow new spending mandates passed by the General Assembly only if a previous mandate is reduced or repealed for the same fiscal year, among other reforms.
The Fiscal Responsibility Act of 2017 would automatically divert excess state income during years with a revenue surplus to the Rainy Day Fund to make that excess revenue available for use in years when revenue is less than projected. It will also end the practice of using occasional temporary revenue spikes to fund known recurring future expenses.
The General Assembly must pass a budget bill by the 83rd day of its 90-day session, April 3.
The Associated Press contributed to this report.