The Spending Affordability Committee, composed of members of the General Assembly and three public members, met on December 15 to make its fiscal policy recommendations to the Governor and General Assembly for the FY 2013 State budget. The Committee typically recommends a target for budget growth based on the current and prospective condition of the state’s economy. However, similar to actions taken last year, the Committee has recommended a target of a 50% reduction in the state’s structural deficit in FY 2013.
Based on discussions that took place during the meeting, and to the disappointment of the Republican members of the panel, it’s expected that actions to meet the 50% reduction will be a combination of spending reductions and revenue enhancements. As reported by MarylandReporter.com:
Legislative leaders Thursday night embraced a “balanced approach” to balancing next year’s state budget, recommending that the governor halve the ongoing billion-dollar deficit using both unspecified spending cuts and possible tax hikes.
The Spending Affordability Committee, dominated by Democratic fiscal leaders, rejected Republican attempts to balance the projected $15.9 billion general fund budget without any tax hikes. Republicans also failed to put a lower cap on new debt as the committee encouraged Gov. Martin O’Malley to “accelerate job-producing investment in infrastructure construction.”
O’Malley is weighing tax increases on millionaires and corporations, as well as a steeper gas tax that hasn’t been raised in several decades. Internet sales and cigars, among other consumer products, could also increase under the budget O’Malley will propose next month.
“Hopefully, we can get some revenues to put some money into transportation and job creation on roads and bridges and infrastructure,” Miller said.Miller said he hoped lawmakers will be able to accelerate a five-year borrowing plan into a couple of years to help create jobs through the state’s capital budget.
Miller said he’d like to see about $500 million in new revenue, but he declined to specify how it would be raised.A transportation commission recently recommended raising $870 million in new revenues for transportation.