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Governor Larry Hogan Addresses Increased Education Funding And State Pension Shortfalls

Administration Takes Steps To Ensure Fiscal Responsibility And Appropriate Funding To Pensions Of State Employees And Teachers

ANNAPOLIS, MD – Governor Larry Hogan today reaffirmed the state’s commitment to K-12 education funding, and announced plans to ensure that the pensions of Maryland state employees and teachers are not put at risk following actions by the General Assembly earlier this year.

“I was elected to deliver fiscal responsibility to Annapolis, which means putting an end to the damaging, budgetary gimmicks that put the state’s long term financial stability at risk,” said Governor Hogan. “But I also want to set the record straight on the investments my administration has made in K-12 education, including a $109 million increase in funding over last year.”

The Hogan administration will provide more in K-12 education funding than any governor in the history of Maryland, including:

  • $6.1 billion in K-12 total investments
  • $318 million in school construction
  • $109 million in additional K-12 funding over FY2015
  • $68 million in discretionary education funding (GCEI)

“We have taken steps to grow education funding, but the state still faces $18.7 billion in unfunded pension liabilities, following $625 million in cuts to pension contributions in the last few years. To address this situation, I’ve decided not to follow the General Assembly’s recommendation to raid the pension fund,” said Governor Hogan. “Doing so would be shortsighted and irresponsible, and I was elected to end this very type of reckless budgeting and governing.”

Since 2012, the State of Maryland has failed to make $625 million in payments to the state employee pension system. During this most recent legislative session, the General Assembly sought to once again reduce payments and further jeopardize the long-term stability of the system. In order to safeguard pension contributions and deliver the necessary funding this year and next, Governor Hogan has committed to supplemental education funding in the form of GCEI at $68 million in FY2016.

The governor also announced that he would allow the mandated GCEI spending bill to pass into law this year without his signature.

Other items in the FY2016 budget will also be fully funded. These include a range of healthcare-related provisions including adult day care, physician rates for Medicaid services, heroin addiction treatments, health services to pregnant women and a variety of other healthcare-related budget items.

Finally, Governor Hogan will provide $30 million in funding from the State’s Capital Budget for the Prince George’s County Hospital, following the completion in 2015 of a 5-year Memorandum of Understanding (MOU) relating to the hospital’s operating costs.

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