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Budget panel looks back at 'revenue disappointments'

With Maryland facing a $2 billion shortfall in the coming year, a House panel began a day of briefings Tuesday with a sobering look back at how much the current year's budget has shrunk.

Warren G. Deschenaux, the legislature's chief budget adviser, characterized the 2010 fiscal year, which began in July, as "a series of revenue disappointments."

Back in 2007, before the onset of the national recession, Maryland legislative analysts projected that the state would take in about $15.5 billion in general fund revenue in fiscal 2010. The latest projection: $12.2 billion.

That's a decline of $3.2 billion -- or about 20 percent.

"If you think it's been tough, you're right," Deschenaux told the House Appropriations Committee at the outset of its daylong retreat in Annapolis.

General fund revenue this year is now projected to be 4.5 percent lower than in fiscal 2009, Deschenaux told the committee. The trend is expected to slowly reverse itself in the coming fiscal year, he said, producing a modest uptick in revenue in 2011 of 3.4 percent over 2010.

Even so, the projected budget gap for 2011 is nearly $2 billion.

Legislative staff provided lawmakers with several possible "gap closers" that could help Gov. Martin O'Malley (D) craft a balanced budget proposal that is due in January.

The largest among them is the continuation of an "enhanced" match in the Medicaid program that was part of the federal stimulus program. Maryland would receive an additional $384 million for that purpose under the health reform bill that passed the U.S. House last month.

Meanwhile, $123 million could be saved if state employees do not receive planned cost-of-living adjustments and other compensation increases. And another $175 million in savings could be realized by extending some one-time budget cuts implemented this year by O'Malley and the Board of Public Works.

Several members of O'Malley's administration, including Budget Secretary T. Eloise Foster and Health Secretary John M. Colmers, are scheduled to appear before the panel Tuesday afternoon.

By John Wagner  |  December 1, 2009; 11:20 AM ET
Categories:  John Wagner , Maryland State Budget  
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Don't increase the gasoline tax!

Posted by: robinficker | December 1, 2009 4:27 PM | Report abuse

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