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State's Budget Problems Grow

Christopher Connelly

  Maryland should expect to have about $271 million dollars less than expected coming into its coffers over the next year and a half – that was the news out of the state’s Board of Revenue Estimates Monday. It follows already downgraded expectations for the state’s revenues.

Comptroller Peter Franchot, the state’s tax man, blamed cuts in federal spending for a state economy growing slower than expected. The state is home to about 300,000 federal workers, as well as numerous government contractors.

Franchot says the state’s growing debt, spending and taxation also played a role. “Whatever the reason is we need to fix it, because our people are gasping for air, and a lot of them aren’t even doing that because they don’t have a job,” he said.

The lower revenue projection – in addition to a $405 million revenue write down in September for this and the next fiscal year -- tees up a budget fight in the next general assembly. Gov.-elect Larry Hogan has promised big cuts. The state’s Democratic legislature is keen to protect spending on education, healthcare and other programs citizens expect.

Franchot urged the governor to use his authority in the Board of Public Works to push for cuts to the current year budget and tamp down spending to get it in line with the lower revenues.

Sen. Roger Manno, who will chair the Spending Affordability Committee starting in January, noted that Virginia, which has an economy similarly reliant on federal jobs and spending, faces a much tougher $2.5 billion dollar shortfall to deal with. “They haven’t done some of the heavy lifting we’ve done since 2007,” Manno said, to reign in and shore up the budget through the recession.

Manno said that the fiscal news is troubling, but said it was not unique. “We’ve had mid-year write downs and over-projected revenues every year for the last two terms of the legislature and this is something we’ve become accustomed with,” Manno said.

Treasurer Nancy Kopp acknowledged that the budgeting process for the next year would be difficult, but said the state’s economy is showing signs of improvement in previous years. Private sector jobs, she said, are driving the recovery, which she called a positive sign.

“While we are faced with a trajectory that’s not going up as quickly we would like in all the areas, it is a heck of a lot better than it was a few years ago,” said Kopp.