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Governor Martin O’Malley Outlines FY12 Budget Focused on Job Creation

Proposed budget closes deficit more than $1.3 billion, shrinks the size of government, reforms state pension system, putting it on a path of sustainability; Includes no tax increases for Marylanders

ANNAPOLIS, MD (January 21, 2011) – 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 2012 budget for the State of Maryland, which closes a projected budget deficit of more than $1.3 billion, invests millions in job creating initiatives, and proposes new reforms to the state pension system, putting it on a path of sustainability.  The FY12 budget brings total reductions under the O’Malley-Brown Administration to $6.6 billion and shrinks the size of government to lower levels than four years ago.

“We are in a period of profound economic change, and these remain still uncertain times,” said Governor O’Malley.  “As Maryland businesses continue to add jobs at higher rates than the rest of the nation, we still must find ways to do more with less while protecting those priorities we share as One Maryland.  This budget is one that is painfully lean, but rightly focuses resources on jobs and innovation – the worthwhile costs of making the right choices and investments in our future.”

For the fifth consecutive year, the FY 2012 budget complies with the General Assembly’s Spending Affordability Guideline.  This year’s recommendation – to reduce the out-year deficit by one third – is exceeded with this budget proposal.  Spending cuts made in the FY 2012 budget reduce the standing deficit by 37%, improving the outlook for FY 2013 by more than $800 million while maintaining a healthy rainy day fund at 5% of revenues.

The proposed FY12 budget focuses more than $3.5 billion on jobs and job creating initiatives, including nearly 15,000 construction jobs supported through the FY 2012 capital budget.

  • Creates InvestMaryland to grow the state’s knowledge-based industries and stimulate up to $100 million in venture capital investments, creating thousands of jobs.
  • Increases funding for the Maryland Economic Development Assistance Fund by 25%, helping to stimulate small business growth and job creation.
  • Funding for stem cell research, bringing the five-year total under the O’Malley-Brown Administration to $76.2 million.
  • Funding for the biotechnology tax credit and the Maryland Biotechnology Center, investing in the new economy.
  • $10 million in Sustainable Communities Tax Credits to promote urban redevelopment and create jobs.

See the Governor’s outlined FY12 budget, including budget history and context, here.

For an electronic copy of the entire FY12 budget, click here.


The FY12 budget proposes a second year of record $5.7 billion in funding for K-12 public schools, bringing the five-year total to $27.4 billion.  This includes more than $128 million for the Geographic Cost of Education Index (GCEI), the third consecutive year of full funding and the only administration to have funded any level of GCEI.

In addition, for the fifth straight year, the O’Malley-Brown Administration has met or exceeded the Kopp Commission recommendations on school construction funding, bringing the total five-year funding level to more than $1.5 billion, a Maryland record.

Public Safety

Last year, together, we drove violent crime to its lowest rate in recorded history thanks to innovative programs that connected law enforcement to each other, traded information across borders, and focused resources on Maryland’s most violent offenders.  The FY12 budget proposal includes nearly $2.18 billion in public safety funding including $108 million for the Department of Parole and Probation, including the Violence Prevention Initiative, targeting more than 2,000 of the State’s most dangerous offenders.

In addition, Governor O’Malley includes millions to advance law enforcement technology, including continued implementation of the Computer Aided Dispatch and Records Management System to assist law enforcement and emergency responders with real-time information, and the Offender Case Management System to track inmates from initial booking through community release.

And to keep police officers on the streets, Governor O’Malley’s FY12 budget includes funding for a trooper class of 80 new recruits, and more than $45 million in local police aid.

Environmental Protection

Since taking office, the O’Malley-Brown Administration has developed innovative tools to scientifically guide environmental policy, and ensure taxpayer dollars spent on environmental protection are done so efficiently and effectively while maximizing long-term impact.  Governor O’Malley’s FY12 budget continues increased funding for the Chesapeake Bay 2010 Trust Fund, and more than $16 million for the cover crop program, which experiences record levels of participation in FY11.

In addition, the FY12 budget focuses investments on the continued expansion of Maryland’s “green job” sector, putting $7 million in Strategic Energy Investment Funds toward clean, renewable energy grants and $1 million to support climate change programs.  In addition, the budget provides more than $6 million for weatherization grants, enough to improve the energy performance of nearly 4,300 low income hones, and $4.7 million for other energy efficiency programs primarily to assist low and moderate income Maryland families.

Health and Wellness

Through a combination of expansion initiatives, the O’Malley-Brown Administration has expanded health care access to more than 247,000 Marylanders who were without health care four years ago, including 117,500 children.  Governor O’Malley’s FY12 budget proposes $7 billion to provide comprehensive health care coverage to more than 900,000 low-income, disabled, and chronically ill children and adults.

In addition, the FY12 budget provides millions for programs for Marylanders with disabilities, including $17 million to expand placements for people with developmental disabilities, and $8 million to raise payment rates for providers of services to people with developmental disabilities.

State Employees

Over the last three years, employees have absorbed more than $580 million of reductions to salaries and benefits.  This year, by Executive Order, Governor O’Malley created a Voluntary Separation Program for state employees, attracting almost 1,400 applicants.  Governor O’Malley’s FY12 budget assumes $40 million in ongoing savings from approximately 1,000 accepted applications to the program.

The FY12 budget includes provisions of a new, three-year contract with the State’s largest employee unions that ends the use of furloughs and provides for future cost of living adjustments and step increases.  In addition, the FY12 budget begins to put the public employee pension and retirement system on a path of sustainability.


Governor Martin O’Malley Announces Plans to Put Pension System on Path to Sustainability

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