Governor Previews “More Painful” Budget

The Baltimore Sun reports today on Governor O’Malley’s comments on the forthcoming FY 2012 budget plan.

Gov. Martin O’Malley said Wednesday that the state budget he proposes next month would be “more painful” than the last two, and hinted at deep cuts in spending.

“Once the legislature gets this budget, the immediate reaction will be ‘surely there is another way,'” O’Malley said. “The pain will be so evident.”

The state’s legislative analysts are projecting a $1.6 billion difference next year between the state’s expected revenues and its spending commitments. The size of the anticipated gap is consistent with those of previous years — but this time the state is not expecting federal stimulus dollars to help.

O’Malley has said his budget proposal would not include tax increases, but would rely instead on a “diet of cuts” to plug the hole. However, he did not rule out agreeing to raises in the gas tax or the alcohol tax, if they are proposed by the General Assembly.

“Right now, I’m preparing a budget,” he said, deflecting questions about the two taxes.

One relatively encouraging note for local governments related to the looming potential shift of teacher pension obligations:

O’Malley sounded unenthusiastic about one quick budget fix: shifting some of the costs of teacher pensions to local governments. The governor said he does not believe the county coffers are “in any better shape” to handle that type of obligation.

The Washington Post coverage includes comments on the revenue forecast:

[F]or the current 2011 fiscal year, analysts are now projecting $57 million more in tax collections and other revenue than thought a few months ago.

In the context of Maryland’s $13.2 billion general fund budget, $57 million isn’t a lot — but it’s better than the repeated write-downs experienced in the recent recession years.

The numbers don’t significantly change the size of a $1.2 billion budget shortfall confronting the state in 2012, Foster noted.

O’Malley (D) underscored that point as he addressed reporters after the panel’s meeting. He is preparing a budget proposal due to the legislature next month that will include hundreds of millions of cuts to state programs.

Michael Sanderson

Executive Director Maryland Association of Counties

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