Reining in the Structural Deficit

In an opinion piece for MarylandReporter.com, Barry Rascovar discusses the State’s structural deficit and how Governor Hogan can address it during his term. From the opinion piece,

The General Assembly’s Department of Legislative Services (DLS) says Hogan is 68% of the way toward wiping out the structural imbalance — and if he continues to hold firm in denying state workers a 2% pay raise starting July 1, he will reach 82% of his goal.

However, also identified are the major cost drivers in the budget – debt service, education funding, and health care costs – and why it’s so difficult to cut these areas.

Debt service alone will jump by $167 million next year. It has tripled in the last three years. Hogan needs to take a hard look at reducing or slowing Maryland’s issuance of general-obligation bonds, including the always popular school construction allocations, which in July’s budget will hit a record $380 million.

Aid to local governments seems a likely target, until you start to pull the plug on specific spending programs, like money for schools, police, fire-fighting, the poor, libraries and parks.

Indeed, almost every area of state government spending affects huge numbers of Maryland citizens. Hogan must take care not to antagonize too many of them. If he does, he could be harming his re-election chances.

In closing, Mr. Rascovar suggests an incremental approach to getting the job done.

Fundamental spending changes won’t be possible with Maryland’s Democratic legislature acting as a brake on Hogan’s budget-cutting tendencies. That’s why the slow-but-steady approach makes so much sense.

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