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This story was corrected on April 12, 2010. An explanation of the correction is at the end of the story.

ANNAPOLIS – Maryland lawmakers on Saturday completed work on the state's $32 billion budget for fiscal 2011, signing off on a plan that relies on spending cuts, one-time transfers and an infusion of federal stimulus money.

The House of Delegates voted 105-34 to approve the agreement reached by budget negotiators this week. The Senate adopted the plan on Friday. Both chambers reduced spending by about $120 million, but did so in different ways, which required the chambers to hammer out differences.

The budget becomes law without Gov. Martin O'Malley's signature. Legislators are constitutionally required to pass a balanced budget before adjourning.

Democratic lawmakers touted the final product as lean and one that preserves investments in education, public safety and health care. Republicans critics said more should have been cut and it fails to address long-term deficits that will lead to tax increases next year when federal aid dries up.

"The programs are not going to go away. The obligations are not going to go away," said House Minority Whip Christopher B. Shank (R-Dist. 2B) of Hagerstown.

The largely party-line House vote – only two Republicans supported it – capped hours of debate on the budget in recent weeks.

It does not shift any teacher pension costs to county governments as the Senate wanted. Instead, it will be studied by a "super blue ribbon" commission that will address state employee retirement, Medicare prescription benefits and teacher pensions. The state will continue to pay the nearly $1 billion cost, even though the payouts are tied to salaries, which are set at the local level.

Lawmakers also directed Gov. Martin O'Malley to cut 500 executive branch positions, for a savings of $18 million. It allocates $6 million for potential state employee buyouts.

The budget doubles to $20 million the amount allocated by senators for the Chesapeake Bay Trust Fund. It also retains money for a legislative scholarship fund that the House had eliminated. And county governments will get more money for road maintenance after negotiators agreed to alter a formula that benefited Baltimore city.

The state will spend $10.4 million on stem cell research, a perennial sticking point. O'Malley (D) had proposed $12.4 million, but the Senate proposed cutting it in half. The extra $2 million will be put towards a biotech tax credit.

The fiscal 2011 budget leaves $195.5 million in a fund balance, excess money the state can use for a midyear revenue shortfall.

House Minority Leader Anthony J. O'Donnell (R-Dist. 29C) of Lusby was displeased with the end result. He challenged Democratic claims that the budget is "historic in nature" because it reduces general fund spending from last year. Rather, he said it's filled with short-term fixes and papers over long-term liabilities, boosting the possibility of tax increases next year.

In O'Malley's budget, projected spending in fiscal 2015 showed a $2.2 billion shortfall. The General Assembly cut that deficit to $1.5 billion.

Del. Wendell R. Beitzel, one of the two GOP members to support the budget – Del. D. Page Elmore (R-Dist. 38A) of Salisbury was the other – said while the final product isn't perfect, it does include some positive things.

"The budget begins to deal with some of the problems that all of us recognize," he said, specifically mentioning unfunded mandates and the pension costs.

The comments did not appear to sit well with O'Donnell and Shank, who stared intently at Beitzel (R-Dist. 1A) of Accident as he spoke.

The headline of this story originally said the legislature signed off ona $32M budget. It should have said it signed off on a $32B budget.