DLS: Time To “Get Real” About State Budget

At yesterday’s Spending Affordability Briefing to the Maryland General Assembly’s Spending Affordability Committee, the Department Legislative Services (DLS) impressed upon committee members that the State needs to “get real” about acknowledging and addressing budget gaps, indicating that volatile income tax revenues and comparatively slow economic growth are, in fact, the “new normal.”

Reports The Baltimore Sun

State forecasters overestimated how much money the state would take in by about $785 million over the course of this year and next. Even under optimistic scenarios, [DLS Executive Director Warren] Deschenaux said the state laws call for spending to outpace revenue by 1.2 percent, a gap that will force policy makers to cut $250 million every single year.

“We need to get real, and getting real means not counting on and budgeting up to every possible dime,” Deschenaux said.

Deschenaux drove home the point that temporary cuts and short-term fixes to closing the budget gap failed to address the sobering reality that the same gaps will recur next year. We are currently not experiencing a recession, and therefore, cannot expect that the economy will turn for the better anytime soon. To address the systemic shortfall and “avoid this sort of ‘Groundhog Day’ without Bill Murray experience,” the Administration and General Assembly would need to identify more long-term solutions, Deschenaux indicated.

When Senator Richard Madaleno (D) asked Deschenaux whether he was saying that the General Assembly had a “spending problem,” Deschenaux responded, “this is an economy problem.”

The Spending Affordability Committee meets again on November 17 at 3pm to discuss spending options. Materials presented at the briefing are available here. Conduit Street’s summary of the materials is available here.