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More Maryland Budget Woes

Less than two weeks into its new fiscal year, Maryland is already facing a $700 million budget shortfall, according to the legislature's chief fiscal analyst.

The gap amounts to about 5 percent of the roughly $14 billion general fund that the legislature adopted in April and that took effect July 1.

"It appears that the state budget is once again being overwhelmed by the deteriorating economy," Warren Deschenaux, the legislature's top budget adviser, wrote in a letter to legislative leaders this week. "Addressing a shortfall of this magnitude will be a daunting task."


The culprit continues to be lagging collection of income taxes, sales taxes and other major sources of revenue on which Maryland and other states rely for services. Deschenaux also faults the revenue estimates that budget writers use.

The budget adopted by lawmakers for the current fiscal year included hundreds of millions in cuts proposed by Gov. Martin O'Malley (D) and advanced by lawmakers.

O'Malley is preparing a round of mid-year budget cuts that he plans to present later this month to the Board of Public Works, a body authorized to cut the budget when the legislature is not in session.

O'Malley told reporters this morning that "everything is on the table" again but provided no specifics.

"It's all going to be painful," he said. "None of it's going to be easy."

Deschenaux suggests additional rounds of cuts should be coming. "The administration should be encouraged to promptly develop and present an aggressive plan to restructure the 2010 budget to a sustainable level," he wrote.

By Matt Mosk  |  July 10, 2009; 10:17 AM ET
Categories:  John Wagner  
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Comments

I'm sure Maryland can tax its way out of this problem. The last tax increases were SO effective! Rust Belt on the Potomac in MO'Maland.

Posted by: lovinliberty | July 10, 2009 11:12 AM | Report abuse

"It appears that the state budget is once again being overwhelmed by the deteriorating economy," Warren Deschenaux, the legislature's top budget adviser, wrote in a letter to legislative leaders this week.
===============

No... the state budget, as it has been for a couple of decades, is being overwhelmed by guaranteed lifetime employment, guaranteed lifetime COLAs, guaranteed lifetime pensions and guaranteed lifetime health insurance. Once government took on the role of premier affirmative action employer, the handwriting was on the wall. Essentially, no one can be fired, no one can be demoted, no one can laid off. The government can only get bigger, and at a rate which outstrips the rest of the economy. And tricks like calling a lower rate of increase than desired a decrease don't help either. For example, requesting an 8% increase and then settling for a 7% increase is NOT a decrease in spending.

Posted by: srb2 | July 10, 2009 11:33 AM | Report abuse

The state raised the regressive sales tax 20% while our neighbor Delaware has no sales tax at all. They raised the income tax for the top bracket 52.6%. They raised the car tax 20%. And they raised the corporate tax 18%. Now they want to raise the gas tax. Raising taxes in a recession puts a damper on spending, which is what has happened here in Maryland.

Posted by: robinficker | July 10, 2009 12:01 PM | Report abuse

I'm sure Maryland can tax its way out of this problem. The last tax increases were SO effective! Rust Belt on the Potomac in MO'Maland.

Posted by: lovinliberty | July 10, 2009 11:12 AM

+++++++++++++++++++++++

Of course, w/o thos tax hikes, the deficit would be double that amount, say 1.4 billion, since Bobby did such a good job cutting spending ~~~ yeah right.

Posted by: vmrg1974 | July 10, 2009 12:39 PM | Report abuse

No surprise here. When 250,000 Maryland residents are illegally in the USA and pay no taxes while consuming massive amounts of school services, health services, and jail services, the state runs out of money.

Posted by: postisarag | July 10, 2009 12:52 PM | Report abuse

Not to worry, the slots revenue will take care of everything!

Posted by: oyvey | July 10, 2009 1:06 PM | Report abuse

I have a child in summer school at Central High School. It costs me $455.00 (early registration)$495 late registration. When I picked him up on Monday (the first day), it looked like regular school time. There were that many kids comming out of the building. I'm figuring about 5 -600 kids at $500/child! As the saying goes in the movie "First Sunday", you do the math. And that is just at Central High. What is being done with that revenue? Just wondering.

Posted by: rjbobby | July 10, 2009 1:09 PM | Report abuse

stop the silver spring library fiasco and save 60 million bucks.

The states attorney general should investigate Ike leggetts pursuti to build a library in a congested intersection of silver spring for 60 milion dollars when the current library can be expanded and sits on over acres of land and next to small park.

I know they are thinking taht condos shuold go on teh existing library site. I
thnk that the taking of public land to give away to the developers in an overbuilt housing market smells.

lets have an investigation and disclosure as to who has dibs on the current library site.

leggett resign and save us the trouble of giving you the boot.

Posted by: JohnAdams1 | July 10, 2009 1:11 PM | Report abuse

Of course, w/o thos tax hikes, the deficit would be double that amount, say 1.4 billion, since Bobby did such a good job cutting spending ~~~ yeah right.

Posted by: vmrg1974 | July 10, 2009 12:39 PM

___________________________________________

VMRG:

I never said Ehrlich did a good job cutting, I only said that MO'M did a good job raising! Ehrlish is as big a politician as the current Gov--he spent and spent and let the good times roll. Still, only a partisan would disagree that MO'Ms tax increases didn't solve the systemic problems (tax increase rarely do at the state level given the movement of capital). Now let's see if MO'M has the courage for cuts, shall we? My suspicion is NO and he'll drive out more MD capital with more tax increases.

Posted by: lovinliberty | July 10, 2009 2:11 PM | Report abuse

Well, I am sure no one is suprised by this "news". Just imagine if the state had not been bailed out by the federal stimulus money how things would look! The General Assembly went home without having to act on any solutions and actually hoped to put all off until the next election was passed! Why the Governor was in DC this week saying he would be open to ANOTHER stimulus! Of course he would! Once again avoiding the hard leadership decisions other Governors have faced - just cruising along relying on the congressional delegation to bail MD out. Just remember Stimulus is just another word for Future Taxes and Debt. Pay me now or pay me later. Maryland of course, will always say "Pay Me" - its just a matter of when and how much.

Posted by: cac11 | July 10, 2009 3:01 PM | Report abuse

What shortfall? Where did all the tens of millions of dollars from red light and speed cameras go?

Posted by: KellyCat | July 10, 2009 3:56 PM | Report abuse

Parallel's between CA & MD, controlled by Dems, runaway illegal immigration and flat broke.

Posted by: je121819 | July 10, 2009 5:17 PM | Report abuse


srb2 wrote: "No... the state budget, as it has been for a couple of decades, is being overwhelmed by guaranteed lifetime employment, guaranteed lifetime COLAs, guaranteed lifetime pensions and guaranteed lifetime health insurance. Once government took on the role of premier affirmative action employer, the handwriting was on the wall. Essentially, no one can be fired, no one can be demoted, no one can laid off. The government can only get bigger, and at a rate which outstrips the rest of the economy. And tricks like calling a lower rate of increase than desired a decrease don't help either. For example, requesting an 8% increase and then settling for a 7% increase is NOT a decrease in spending."

He's right, and he should be hired by WaPo, a.k.a. Guapo in Spanish, in order to provide readers with a more objective and balanced coverage on local and state issues, not just the politician' and/or special interest. We have a one-party state (Democrats) with some institutions like the state legislature for over a century controlled continuously by Democrats, and a bureaucracy both at the state and at the largest counties in Maryland that is largely the product of political patronage. Compounding the problem is a chronically dysfunctional Republican Party and the news media that is subservient to politicians. No wonder Maryland continues to be one of the most corrupted states in the Union. No wonder many view the Democratic Party as the largest employer in Maryland offering "guaranteed lifetime employment regardless of job performance, guaranteed lifetime COLAs, guaranteed lifetime pensions and guaranteed lifetime health insurance."

Posted by: GoodAmerican | July 10, 2009 10:59 PM | Report abuse

This is why I moved to Virginia. Enjoy your higher taxes and electricity rates Maryland voters – you deserve them!

Posted by: Kevin_McManus | July 10, 2009 11:07 PM | Report abuse

What the F___ are you smoking?

Nobody in State government has "guaranteed lifetime employment. guaranteed lifetime COLAs, ...and guaranteed lifetime health insurance." No COLA this year for me or any other State employee, and there continues to be no guarantee of lifetime employment. And yes, people can be fired, demoted, and laid off. We served fuloughs this year and took a reduction in salary. I have no idea where you may be coming up with this garbage but you are wrong, dead wrong.

You may wish to consider posting when you are not drunk or high.

"No... the state budget, as it has been for a couple of decades, is being overwhelmed by guaranteed lifetime employment, guaranteed lifetime COLAs, guaranteed lifetime pensions and guaranteed lifetime health insurance. Once government took on the role of premier affirmative action employer, the handwriting was on the wall. Essentially, no one can be fired, no one can be demoted, no one can laid off. The government can only get bigger, and at a rate which outstrips the rest of the economy. And tricks like calling a lower rate of increase than desired a decrease don't help either. For example, requesting an 8% increase and then settling for a 7% increase is NOT a decrease in spending.


Posted by: srb2 | July 10, 2009 11:33 AM "

Posted by: misfit614 | July 10, 2009 11:21 PM | Report abuse

"It appears that the state budget is once again being overwhelmed by the deteriorating economy,"

-------------------------------------------

For accuracy in reporting let's change two words at the end of that sentence.

"It appears that the state budget is once again being overwhelmed by the illegal aliens,"

Posted by: waterfrontproperty | July 10, 2009 11:45 PM | Report abuse

Well voter financed gambling produced nothing, just tax payer pay to play political shell games – find the canole.
Paying for the hole in the governors and it's democratic Party leader, Mike "the Man" in Annapolis. Party Leader, Mike and O’Malley have "power meetings at the Arundel Mall (ultimate winner -slots) sipping Orange Julius with deficit "holes in the heads" over meet and greet Democrats at the lunch counter. A Tax payer funded "free" road projects under Mr. Ulysses’ who’s favored Chain store he sits on it’s “Maryland Planning Committee.”

Happy Jack’s, P.G. County’s voter funded playground "river front" a conman's paradise on the Potomac.

Pubic School Graduates who's majority still cannot read, and a majority Democratic party legislature that have Maryland taxpayers subsidizing government facilities providing it's citizens no tax relief -- great system of electoral politics and very uneducated voters, that gamble on their children’s education - no winners, except the politician who is not effectuated by lay-offs or job losses!

Only a 5% deficit?

Please, learn how to report accurately.

Posted by: eglobegus | July 11, 2009 2:20 AM | Report abuse

maryland lost 100 of it's 300 millionaires...
why...
because of taxation...
sooner or later the poor will start to pay...
because there is noone else left to pay...

Posted by: DwightCollins | July 11, 2009 7:13 AM | Report abuse

Maryland's citizens are victims of more governmental involvement in their daily lives than the citizens of 45 other states according to recently published list of the freest and least free states. All this nanny state apparatus costs money. If the legislature would zero base the laws and limit government to the basics, there would be far fewer people on the taxpayers' payroll.

By the way, I agree that being a government employee is not necessarily a "safe" harbor for incompetents; however, compared with Virginia, Maryland does seem to have a surly bunch of people dealing with the public.

Posted by: ben18 | July 11, 2009 8:58 AM | Report abuse

In the many years of good times what did the government do with the windfall from taxes it collected? As with the average citizen who must live within their budget [earning and savings] the government continuously over projects it’s spending and in the event of a downturn in the economy it raises taxes. I believe this and all government entities [local, state, federal] there must be balanced budget regulations to reign in overspending and make government more responsible. The people should demand fiscal soundness and not overspending the means the tax base supplies. Until we require our government to act fiscally responsible our tax problems will never cease. We must live within our means, why doesn't the government?

Posted by: arclight69 | July 11, 2009 11:09 AM | Report abuse

First of all, they should get rid of the concept of "political appointees" - where 7000 people are hired at the "pleasure of the Governor." Compare to Virginia where it is in the low hundreds...it is incredibly expensive to fire and re-hire new employees each time there is a change in administration. Second, the State of Maryland should NEVER own the airports - BWI and Martin State - since the revenues end up in the Transportation Trust Fund (grandfathered by FAA) to be used for any transportation need. Except for Hawaii and Alaska - for obvious reasons - only CT owns their largest airport and it is a disaster with 3 Directors in the last year. Third, employees engaged in operational jobs, rather than policy or politics, should be fairly evaluated and promoted based on skills.

It's amazing that the State of Maryland is littered with employees who got their jobs because they live next door to "someone" or run political campaigns from their offices.

The State could do twice as much with half as many people - if only they hired competent employees.

Posted by: carolineC1 | July 11, 2009 11:20 AM | Report abuse

I'll bet Governor O'Malley would love to hear constructive suggestions for ways to resolve the current budget crisis. Those of you with something other than knee-jerk partisan politics on your mind would do well to write or speak with the governor and offer your good suggestions. I do and Governor O'Malley does listen to suggestions from citizens!

Posted by: thw2001 | July 11, 2009 2:07 PM | Report abuse

Wow--thw2001 goes to Annapolis! Thanks for the civics lesson. I'll sit down and write a latter to MO'M telling him to make cuts. As a person representing business in MD I can say that there are plenty of bureaucrats who have to go. The "toll gate mentality" of regulation in MO'Maland is precisely why my clients tell me how they have more compliance personnel and hours per product for Maryland. There are reasons why Md's revenue is off--bad business climate and high taxes are the two most obvious. Not to fear though they'll fix the problem with more taxes ....

Posted by: lovinliberty | July 11, 2009 3:39 PM | Report abuse

When I was growing up, MD had a reputation as a nice place to live. Now, it's become another area with serious problems. The people posting here are a small slice of Marylanders--but nobody says "Maryland's on the right path," or "I'll pay more to receive the services I get now." No new ideas in Md, just tax, spend, create regulations for businesses and attract illegal aliens-America's future.

Posted by: mclovin | July 11, 2009 9:59 PM | Report abuse

I'll go with that. To preserve the high quality of life my family enjoys in Maryland now, I'd pay more taxes, but I do NOT believe we have to...yet. Things could worsen economically, but when we are wasting $3,200,000,000 on an ICC toll road boondoggle, it makes tax hikes hard to swallow.

Posted by: free-donny | July 13, 2009 9:56 AM | Report abuse

won't see my vote for next election

Posted by: tsugua | July 13, 2009 1:34 PM | Report abuse

The culprit was the economy? Stunning since the economy looked worse six months ago than it does today and that would be about the time those bright folks would have been writing the budget. Or is this another case of 'lets make believe the revenue will be so bright it will light the night star?' Sure sounds like the latter.

Posted by: h20andoil | July 13, 2009 6:46 PM | Report abuse

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