ANNAPOLIS, Md. — Maryland lawmakers will be wrestling with a bigger budget problem than they expected, after officials revised the state’s revenues down by about $238 million on Thursday for the current fiscal year and the next.
The revision comes as lawmakers on a Senate budget committee are about to begin making decisions on changes to Gov. Martin O’Malley’s budget proposal for the next fiscal year. Overall, lawmakers are battling a $422 hole in the state’s general fund, when the downward revision is combined with deficiencies in the state general fund and about $10 million less in expected revenue from the state’s casinos.
Warren Deschenaux, the General Assembly’s chief budget analyst, pointed out a projected budget deficit of about half a billion dollars in fiscal year 2016. He urged members of the Senate Budget and Taxation Committee to find as much savings as they can now to address current and future budget challenges.
“You should not be shy about leaving fund balance if you have the opportunity in your process, because it and more will be needed to get you out of ’16 — however you elect to get out of ’14 and ’15,” Deschenaux said.
Deschenaux presented a variety of options lawmakers could choose from to pick up substantial savings in the budget.
The Geographic Cost of Education Index, which helps parts of the state where schooling costs more, was a big-ticket item that was mentioned as a place for possible savings. A 50 percent cut to the GCEI, which is non-mandated component in education aid, would save $67 million.
Another possibility on the list would shave $10 million from a fund to help clean up the Chesapeake Bay.
Additional savings could be found by reducing some increases in the budget for state personnel, including merit increases and cost-of-living adjustments. Those two alone add up to about $116 million.
A $4 million prekindergarten expansion in Gov. Martin O’Malley’s budget for 1,600 children also made the list of possible cuts. A cut to added money for higher education also was noted as a way to save $10 million.
At a meeting of the Board of Revenue Estimates, which made the downward revenue revision, officials attributed the drop in estimated revenue to a variety of factors. Federal budget battles in Washington last year had a significant impact on federal workers who live in the state. Growth in food and energy costs and expiration of the federal payroll tax holiday also were noted.
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