As reported by the Baltimore Sun, Maryland ended fiscal year 2011 with unspent funds of $990 million, which is $344 million over what was originally estimated. While this is good news, it is not enough to address further economic uncertainties, possible reductions at the federal level, and a $1 billion structural deficit for FY 2013.
Based on previous revenue estimates, the State was already anticipating closing out FY 2011 with excess funds of over $640 million, which has been factored into balancing the FY 2012 budget. The additional $344 million in revenue will largely go into the State’s Rainy Day Fund, with approximately $10 million of the additional revenue being used for day-to-day operations.
From the Baltimore Sun article:
O’Malley cautioned that there still are “tough choices” ahead for Marylanders — in the best-case scenario, he said, the larger-than-expected revenues turn next year’s $1 billion projected deficit into a $700 million gap.
O’Malley also cautioned that the federal government could still take a whack at the state’s budget when the congressional panel on deficit reduction makes its recommendations.
Maryland’s budget relies on roughly $9 billion from the federal government, some of which could be in jeopardy. Rep. Chris Van Hollen, a Montgomery County Democrat, is a member of the 12-person committee.
As reported by MarylandReporter.com, Comptroller Peter Franchot said that while the numbers look good, he repeated his advice that the extra funds should be tucked into the state’s Rainy Day Fund to hedge against continuing economic uncertainty.