Governor Transcript: January 19 Press Conference

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GOVERNOR HOGAN: Good afternoon. Thank you all for being here. Joining me today are budget Secretary David Brinkley, deputy budget secretary Marc Nicole, and chief legislative officer Keiffer Mitchell. Tomorrow we will officially submit our FY22 budget to the Maryland General Assembly. In recent days we have briefed the majority officers and minority leaders. Tomorrow morning we will do a briefing for all the legislative official leaders. No discussion of this year’s budget can begin without first recognizing the enormous and unprecedented system challenges that our state and our nation have faced as a result of the COVID‑19 pandemic.

Last March, while we were taking daily action to save lives and livelihoods, state budget officials presented me with official projections more dire than any of us had ever seen. And the projections show that immediate 50% drop in revenues and more than $7.5 billion in revenue losses which would have wiped out all of the incredible economic progress that we were able to accomplish over the past six years.

In an effort to avoid that fiscal crisis, back in March I took immediate action freezing all nonemergency COVID‑related spending and directing the Department of Budget and Management to recommend cuts to all state agencies. I vetoed all legislation that requires any significant spending increases. And then in May, we took immediate budget reduction to the Board of Public Works. On July 1st, the very first day of the new fiscal year, I pushed the board to approve a series of additional tough but targeted reductions. The combination of all of these early and aggressive actions along with the more than 700 million in emergency economic relief which we pumped out into our economy and the federal funding, which we pushed for, secured and deployed through the CARES Act, the payment protection program and the new COVID‑19 federal relief bill as well as all the steps we took to safely reopen Maryland’s economy, all of those things have dramatically improved our state official outlook. Without all of those actions, the budget that we are presenting tomorrow would look radically different.

Our economic recovery budget for FY2022 will provide immediate, targeted, emergency tax relief and economic stimulus to help struggling Maryland families and small businesses who need it the most. Our budget provides record assessments in education, crime prevention, public health, and all of our key priorities. It also lays the foundation for a strong economic recovery for Maryland, while at the same time maintaining our commitment to fiscal responsibility. For the seventh straight year, our budget is 100% structurally balanced. We’ve accomplished this with no tax increases, without any layoffs or furloughs for hard‑working state employees, and without cutting any essential services for Maryland citizens.

Consistent with the General Assembly affordability requirements, this budget maintains the necessary reserve which will help preserve our AAA bond rating which will allow us to remain prepared over the next few months which we expect could be some of the most challenging of the pandemic, while also enabling us to provide important targeted relief to those who need it the most. All of the specific details of the budget will be released tomorrow when the budget is officially presented. But let me go through some of the highlights of our recovery budget.

Our top legislative priority is the Relief Act of 2021 which this budget reflects. It provides more than a billion dollars in immediate, targeted emergency tax cuts and financial relief for Maryland families and small businesses that need it most, including immediate rebates to more than 400,000 low‑income Marylanders who receive the earned income tax credit. It also permanently repeals the personal income tax on unemployment benefits and provides immediate sales tax cuts of up to $12,000 for more than 55,000 small businesses, enabling them to keep more money in their pocket, to keep their businesses open, and to keep more people on the payroll. In addition, our budget calls for reducing the tax burden on all of Maryland’s retirees. This includes more than $1 billion in tax cuts to help every single retired Marylander, making it more affordable for people to stay and retire here in Maryland. Even though we’re one of the best places to live in America and we have so many great things going for us, we’re losing many of our best citizens. People who have been life‑long Marylanders and have contributed so much and still have more to offer are moving to other states for one reason, our state’s sky‑high retirement taxes. This legislation will help keep tens of thousands of Maryland retirees from being forced to flee our state. In addition, we will expand the Hometown Heroes tax cut to exempt law enforcement, fire, rescue, correction, and emergency response personnel from state tax on all retirement income specific to their service. And we will increase this tax exemption for all military retirees. After a long and difficult year of sacrifice and struggle, my top economic priority is making sure that Marylanders can keep more of their hard‑earned money in their pockets. The last thing that should ever be done in the middle of this pandemic would be to increase taxes on struggling families and small businesses. That would cause more suffering and it would short circuit Maryland’s economic recovery.

I’ve always believed that every single child in Maryland deserves a world‑class education, regardless of what neighborhood they happen to grow up in. This is especially important now when we are working to address the learning loss caused by the disruption of the pandemic and as we continue our push to get all of our students back into the classroom. For the seventh year in a row, we are providing historically high record funding for K‑12 education. This budget invests a record $7.5 billion in the K‑12 education, which is $213 million above and beyond the education spending formulas proposed by the legislature.

Their formulas would have actually significantly cut education funding due to significantly declining enrollment figures. We are providing additional direct state investment to ensure that not only will every single penny that every single jurisdiction anticipates from the state for education be fully funded at 100%. But that in addition every single school system in Maryland will, once again, see increased investment by the state. This is also the third budget that the casino lock box allocates the casino revenue directly into the schools to supplement education funding. This puts an additional $375 million directly into our school system without the need to raise any state or local taxes.

In addition, we’re also providing an additional $151 million for targeted tutoring grants in every local jurisdiction to support those students who are most at risk of learning loss. $53 million to expand full‑day pre‑K for every 4‑year‑old in the state and $10 million to expand our highly successful BOOST program, which provides scholarships for deserving students to attend nonpublic schools. Our capital budget will include a record $833 million and additional school construction funding, including the first year of our $3.6 billion initiative to fulfill every single one of the county funding requests, to bring every single one of the state schools into the 21st century. This is the largest investment in school construction ever in Maryland history. No governor in the history of the state has ever invested more in K‑12 education.

Our budget will also provide $411 million more for higher education projects, including funding for major projects at all of Maryland’s HBCUs which we, once again, continue to fund at record levels. We also provide record funding for our community colleges, which receive funding for all of their top priorities. And we are, once again, taking action to help Maryland colleges and universities hold the line on tuition rates. Our 2022 capital budgets continues our balanced approach for infrastructure with a billion dollars more for roads and highways and a billion dollars more for mass transit projects. We have invested far more in both roads and transit than any other administration in Maryland history.

And, once again, we are moving forward on nearly all of the highest priority infrastructure projects in every single jurisdiction all across our state, including the transformative Howard Street Tunnel Project which will dramatically increase the revenue at the Port of Baltimore and create tens of thousands of Maryland jobs. It’s one of the most impactful economic development, job‑creating projects in state history.

On the environment, once again, we were able to fully fund Chesapeake Bay restoration efforts for the sixth straight year and fully fund Program Open Space and other land preservation programs for the fourth consecutive year. We’re providing nearly $43 million for renewable energy programs. Another $14 million will be dedicated to energy efficiency programs. And we’re committing $4 million to extend the currently expired zero‑emissions vehicle tax credit. This budget also tackles some of our most urgent public health and public safety priorities, including our efforts to address violent crime. We are providing $74.6 million to fund police aid to local governments. We’re providing $43.7 million for direct local law enforcement grants, including 3 million to protect Marylanders against hate crimes. Our budget provides an additional $5 million for the third year of our initiative to support crime prevention, prosecution, and witness protection efforts in Baltimore City.

This budget provides nearly $250 million for community and residential operations to provide direct care services to youth and supports our comprehensive juvenile crime strategy to reduce the number of violent youth offenders in Baltimore City.

And a record $9.6 million in savings are realized through our ground‑breaking bipartisan Criminal Justice Reform Act. To continue exploring an evidence‑based way to decrease crime and reduce recidivism. And we are proposing a record $978 million for mental health and substance abuse programs, to help combat the heroin and opioid epidemic and other mental health and substance abuse disorders. This is our ongoing response to the pandemic and ensures Marylanders continue to have access to health services, increasing funding for local health departments, well above their grant formulas, fully funding and accelerating health care provider rate increases, expanding resources for developmental disability services and expanding programs to provide in‑home care for the elderly.

If you had told me last spring when we faced the prospect of a near fiscal Armageddon that we would be able to introduce a budget that provides a billion dollars in immediate tax and stimulus relief for struggling families and small businesses that makes record investment in education, public health, and other key priorities, which is structurally balanced, without any tax increases, furloughs, or cuts to services, I would not have believed that it was possible. But that is exactly what we have been able to accomplish with this FY2022 budget. I want to thank Budget Secretary David Brinkley, Deputy Secretary Marc Nicole at DBM and all of our team, the cabinet and all of the executive departments and agencies, for all of their efforts and hard work in accomplishing this Economic Recovery Budget.

The submission of the budget tomorrow is the next step in the process, and we look forward to working together with the House and the Senate in a bipartisan and collaborative fashion to enact our final budget. It is our sincere hope in this state of emergency that they will be able to complete their work with all due urgency. This Economic Recovery Budget and the Relief Act of 2021 with all of its immediate, emergency, and tax stimulus relief are far and away the most important thing that the legislature must address right now as we continue our work, prevent more illnesses and deaths, to get our kids back in school, to mitigate the damage to our economy, and to bring about a robust health and economic recovery, and eliminate and eradicate this pandemic.

With that, I would be happy to take a couple of questions. (Question off mic).

GOVERNOR HOGAN: It wasn’t magic, it was just all of the things I laid out. We took early and aggressive actions. The revenues of our state came back faster than anyone anticipated. We were able to keep 70% of our economy open throughout the entire pandemic. We opened up 100% of our businesses back in July. So we’re ‑‑ the revenues are coming in at a better rate. We took some pretty serious cuts back in March and April and July. And we received some federal funding help in a number of different tranches that came in with the CARES Act and the Payment Protection Program. There was a lot of hard work, a lot of belt tightening, and a little bit of luck. Maybe some magic. But we’re happy to be able to do it.

(Question off mic).

GOVERNOR HOGAN: I can’t imagine they can possibly say that. After what I just went through with you, I prefer they say this is fantastic. How fast can we get it passed?

(Question off mic).

GOVERNOR HOGAN: Well, we’ve had this disagreement about we provided record funding. Last year we put in the largest school construction funding bill ever. They killed the bill last year. Six years in a row we provided record funding for education, and we’re continuing to do that. But we still don’t agree with $4 billion more per year and massive tax hikes that would cost the average family $6,800 per year.

(Question off mic).

GOVERNOR HOGAN: I didn’t hear what he said, but I think that would be a terrible mistake in the middle of this battle the General has led us through. This incredible crisis that built the additional 6,000 surge beds, that got the additional 6.4 million tested and is now leading the charge on the vaccinations that we have 12 million of. I didn’t hear his comments. I think it would be the worst thing they could possibly do.

(Question off mic).

GOVERNOR HOGAN: We’re making a decision every week based on how the providers are getting the vaccinations done. As I mentioned at multiple press conferences, we first provided 100% hospitals ‑‑ 100% capacity at the health department and all the local health departments, what we are finding is they are not getting them done fast enough. We don’t want them to sit around. We are opening them up much fast than we anticipated to get the vaccines put into more arms. But I said it’s likely to switch in the coming weeks, instead of why do you have so many to why do you not have any left. We’re just trying to find that right spot. I think the President‑elect is going to have some discussions hopefully in the coming days about increasing potentially the delivery of vaccines to get to us. But we’re going to continue to keep taking the actions. We added additional private sector providers. We are talking about standing up mass vaccination sites. Now we’ve got 1.5 million people that are allowed to get the vaccine, which is 3 million vaccines. We only have 500. So certainly that’s not enough. But we get about 70,000 every week. We also have an incoming President saying he’s going to try to get 55 million more into the states. So we’re hoping that’s true.

(Question off mic).

GOVERNOR HOGAN: Because we had 300,000 that were still there that weren’t being used in the first phases. So we said from the beginning we were going to be like Southwest Airlines, we are going to be first and then move to the next section and the next section. We will not stand for people not getting the job done. We will make sure they all get used.

(Question off mic).

GOVERNOR HOGAN: I think you will find out tomorrow when we submit the budget.

(Question off mic).

GOVERNOR HOGAN: It was part of my presentation. I gave you a lot of stuff.

(Question off mic).

GOVERNOR HOGAN: I think we’re going to launch a major marketing campaign and try to get some trusted folks to get out there and help convince people that they need to take the vaccine. As I said, a couple of times, we’ve repeated it, all the federal partners are saying it at well, if we can’t get people to take the vaccine, we’re not going to eradicate this virus and we’re not going to be able to get back to normal. So it’s a job not just for us but for almost everybody. If you can’t get people in the hospitals to take it and some of our communities take the vaccine, then it’s not going to be successful. It’s going to be a big part of our strategy. We’re going to put time and energy and money into marketing of the safety of the vaccine. That’s why we got our vaccine visibly yesterday to show it was safe and we will have multiple people doing that for months to come.

(Question off mic).

GOVERNOR HOGAN: I think we were ‑‑ look, I mentioned the CARES Act, Payment Protection, we have gotten some help. But we did not get the state‑level help that the national governors association was pushing for. The Biden team said they are going to push for that. We are looking for some direct assistance to the state and local government, which will be terrific. I think they’re also talking about more direct stimulus payments. We’ve been digging into our funding to try to come up with ways to help but more help from the federal government is welcomed. I think we’re going to see some of that detail roll out in the next few weeks.

But, again, he’s going to have to get that through Congress. Hopeful. But frustrated it took us eight months to get this far.

(Question off mic).

GOVERNOR HOGAN: I’m not quite sure I followed you.

(Question off mic).

GOVERNOR HOGAN: We want to prioritize getting teachers back in the classroom. I think it’s something that the President‑elect, President of the Senate, everybody is saying getting kids back in the classroom as quickly as we can is top priority. It’s what our state superintendent has been pushing with all the counties. And the only reason we’re trying to get teachers vaccinated quickly so they can get back to the classroom. We’re going to push to get everybody vaccinated and get kids back in school.

All right. Thank you.
 
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