The Road Ahead for State Fiscal Decisions

As usual, the Spending Affordability process offers clues to the fiscal debates in the year ahead. This year, both the level of overall spending and the priorities within the budget plan appears to be in play for major political attention.

Maryland’s well regarded Spending Affordability Committee and process require a group, largely legislative but including two citizen representatives, to opine on spending limits and polcieis for the year ahead. In preparing these legally non-binding limits, they evaluate economic trends, changes in state policy, and other effects to arrive at their conclusions. The process usually offers the public and interested stakeholders their deepest insight into state fiscal affairs.

The Committee’s 2015 report offers insight into the spending debate for the year ahead. The Committee adopted this overall statement on state spending:

[T]he committee recommends that the fiscal 2017 general fund budget maintain structural balance and that appropriations subject to the spending affordability limit shall be limited to growth of no greater than 4.85% over those approved at the 2015 session. This limit places growth in State spending in line with the average anticipated growth in personal income for calendar 2016 and 2017. This limit would provide for a $1,184 million increase in appropriations at the 2016 session, allowing for total expenditures subject to spending affordability of $25,601 million. This growth limit provides sufficient resources to support the full funding of mandated education costs and other mandated programs, as well as merit increases and cost-of-living adjustments for State employees.

In coverage of this announcement, Budget Secretary David Brinkley offered his views on the coming Administration budget, as reported by MarylandReporter.com:

In an unusual move, the Spending Affordability Committee made up of fiscal leaders from both Senate and House called on Budget Secretary David Brinkley for his reaction. Just a year ago, Brinkley was a Republican senator sitting on the committee.

“The governor’s still making some major decisions,” Brinkley told them. “Whatever you do adopt, the governor is going to come in under it.”

The revenue picture has improved, “but we’re not out of the woods,” Brinkley said. “We need structural repairs in the out years,” with forecasts that deficits will return in three years.

“Let’s take our time to fix the problems,” Brinkley said.

As a reminder, Maryland’s budget process is deeply executive-driven. The General Assembly may reduce or restrict funding the Governor has requested, but may not add to his budget, nor may they “move” funds from one area to another. (As a structural offset to thus unusual power, the Governor in Maryland lacks any veto authority over the final budget, which itself becomes law upon passage by the General Assembly) Thus – the Speaker summed up the pending budget issue concisely: “The governor has a right to do that,” House Speaker Michael Busch said. “We’re just putting in what we’d like to see. (also from the MarylandReporter article)

Read the full Spending Affordability 2015 Final Report.

Read previous MarylandReporter coverage.

Michael Sanderson

Executive Director Maryland Association of Counties
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