Budget Committees Hold Fiscal Briefing on Governor’s Proposed Budget for FY 2015

The budget committees of the General Assembly held their annual fiscal briefing on January 20, 2014, to hear from the Department of Legislative Services (DLS) on the Governor’s proposed budget for the upcoming fiscal year.  This briefing provides a comprehensive overview of the state’s economic and revenue outlook, the assumptions used to prepare the Governor’s FY 2015 proposed budget, the status of the state’s general fund, aid to local governments, the capital budget, and other budget issues of importance. A previous post on Conduit Street provides links to all relevant sections.

This meeting also sets the stage for General Assembly budget negotiations and provides the opportunity for DLS to raise issues or concerns with the approach used by the Administration to balance the budget. As reported by MarylandReporter.com:

…the legislature’s chief fiscal analyst told lawmakers Monday that the administration relied on “familiar budget balancing strategies” to make the numbers work.

Analysts also expressed concern over the fund balance that would be left at the end of fiscal 2015.  As reported by the Annapolis Capital:

Warren Deschenaux, the General Assembly’s chief budget analyst, said O’Malley’s budget proposed last week would have a balance of about $30 million. Deschenaux told members of the Senate Budget and Taxation Committee and House Appropriation Committee that the state has had millions of dollars in budget deficiencies in recent years that have had to be made up.

An issue of concern for some committee members is the Governor’s decision to reduce the amount of funding going towards the unfunded liability of the pension system. As described by the MarylandReporter.com in a previous post on Conduit Street:

When cuts to benefits and increases in employee contributions were passed in 2011, the state agreed to put an additional $300 million a year into the state pension system. That was cut to $200 million this year and now also in the proposed budget, allowing $172 million in “spending reductions” to be used for other programs.

Budget committees will begin holding agency budget hearings this week. The State’s budget must be passed by March 31, according to the General Assembly calendar.