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MARYLAND’S BUDGET & LEGISLATIVE PROCESS The Maryland General Assembly meets in Annapolis each year for 90 days to act on more than 2500 bills including the State's annual budget. The 427rd Session began January 13, 2010 and adjourned April 12, 2010. The General Assembly has 47 Senators and 141 Delegates elected from 47 districts. House and Senate Standing Committees House Appropriations Economic Matters Environmental Matters Health and Government Ops. Judiciary Ways and Means Rules and Executive Nominations Senate Budget and Tax Education, Health & Environmental Affairs Finance Judicial Proceedings Executive Nominations Rules HOW A BILL BECOMES LAW BILLS BUDGET BILL JOINT RESOLUTIONS THE BILL CYCLE – The Beginning • Idea for legislation is shopped to a legislator for sponsorship • Must be limited to one subject. Subject must be clearly defined in the title • Must meet set standards and are drafted by the Department of Legislative services. • Drafting requests are for the next legislative year. Drafting starts in April • Prefiles – Bills filed with the Secretary of the Senate or the Chief Clerk of House Average No. of Bills filed each session – Senate 1,000 House1,500 The Bill Cycle – The General Assembly Bill is introduced in either House or Senate (1st Reading) Assigned to a Senate or House Standing Committee either by the House Speaker or Senate President Bill is assigned a hearing date by committee chair and fiscal note is Worked up and attached to bill. Hearings are held that allows both written and oral testimony to be presented. Consideration of Committee Report (2nd reading) – favorable or unfavorable – with or without amendments. Presiding officer orders the bill with adopted amendments, printed for third reading Floor vote (3rd reading) Vote taken to pass or Reject the bill Sent to second chamber – Identical procedure followed 2006 Legislative Session HB 1380 House 138-0 Senate 47-0 SB 709 House 134-0 Senate 47-0 $5 million annual capital funding for public libraries Provided for the first time in the history of the state a dedicated stream of money for public library construction and renovation Signed by the Governor May 2006 The Budget Bill Overview Mandated by State Constitution – establishes the respective powers of the Governor and the Legislature regarding the budget. Fiscal year – begins July 1st and ends June 30th. Governor’s Powers Presented by the Governor to the General Assembly for the Next fiscal year Governor must submit a budget to the General Assembly no later than the 3rd Wednesday in January or by the 10th day of session. Budget must be submitted balanced. In other words the proposed appropriations must be supported the estimated revenues. Submits supplemental budgets as session progresses **** General Assembly can reduce Governor’s budget proposals but not increase them The Budget Bill – Overview Legislative Powers Budget Bill is introduced in both houses - By custom the House and Senate move the bill in alternate years the House in odd numbered years and the Senate in even Main Power – Can reduce or delete appropriations proposed in the budget bill. Can also add language restricting or putting conditions on how funds can be applied. Must complete action on the budget by the 83rd day of session If not passed by 90th day, Governor can extend the session Budget is enacted upon passage – does not need Governor’s signature Nor can he veto it THE BURFA THE BUDGET RECONCILIATION AND FINANCING ACT Submitted with the Budget but as a separate bill Focuses on changes including reductions that must be changed by law in order to balance the budget. The Three Stages of the Budget Formulation Enactment Execution Formulation Budget process starts 9 months before the beginning of session •May – June Each state agency receives instruction on how to prepare the budget by Department of Management and Budget (DBM) • July – Aug: Agencies Prepare their budgets • September: Agencies submit to DBM • October: Board of Revenue Estimates reports to Governor • November: DBM makes final recommendations to Governor • December: Spending Affordability Committee makes final report • January: Governor submits budget to General Assembly 2 0 2010 Budget 2010 Budget Enactment Budget bill is introduced and assigned: Senate: Budget and Tax Committee House: Appropriations Committee Hearings are held over a six-week period beginning the third week of the Session. Recommendations can be made to cut, reduce, or restrict Enactment Second House • Receive budget bill reflecting changes as passed by the first house • Follows same procedure as in the first house • If unchanged from the first house bill is enacted upon passage • If amended the bull goes back to the first house to accept or call for a conference committee to resolve differences • Final bill proofed and verified by Dept. of Leg. Services and enrolled Execution • Once passed, the budget bill becomes law • Governor does not sign and cannot veto • Deficiency appropriations become immediately available • All other appropriations become available July 1 of new fiscal year Fiscal year 2009 Budget The Last Year of Growth Budgets House Bill 50 (enacted) provided $30.0 billion in appropriations Increased the 2008 budget by $550.7 million (1.9%) Aid to Local Governments County/Municipal Community Colleges Education/Libraries Health $7.5 billion Entitlements $6 billion State Agencies $6 billion The 2010 Budget Looming Structural Deficient – At the time the 2008/2009 budget was passed we already could see: • • Potential cash shortfall of $1.5 for 2009 and 2010 $1.7 billion shortfall between revenues and current services Causes – Bridge to Excellence (Thornton) Earlier repeal of State Income Tax Lack of sufficient tax revenues Entitlements • Required by law to fund: State Employee/Teacher Retirement & Pension System Medicaid K to 12 Education Community Colleges (Cade Formula) The 2009 Write Down • By law the budget must be balanced • Projected revenues kept being recalculated • Revised Budget must be submitted to Board of Public Works. Board of Public Works • Nancy Kopp – State Treasurer • Martin O’Malley – Governor • Peter Franchot – Comptroller - Ensures that significant state expenditures are necessary and appropriate, fiscally responsible, fair, and lawful. - Approves funds for capital projects - Makes sure that executive decisions are made responsibly General Assembly: http://mlis.state.md.us/ Governor O’Malley: http://www.gov.state.md.us/ Board of Public Works: http://www.bpw.state.md.us/ What’s Next?