What Might Be On “Chopping Block” If Revenues Sink?

Legislative Analysts have revealed a preliminary list of potential budget-balancers if the March revenue adjustments bring bad news.

The Department of Legislative Services (DLS) presented a set of “Additional Reduction Recommendations” to the House Appropriations Committee on February 26, detailing a range of possible accommodations that may be required to absorb a meaningful write-down in revenues in early March. Many of the recommended items would require legislation, suggesting that a “reconciliation bill” might be needed this session. The Governor did not introduce an all-purpose “BRFA” (Budget Reconciliation and Financing Act) this session, leaving the legislature without its typical vehicle for such financial adjustments.

In the report, DLS offered a long series of potential decisions to either reduce spending or transfer funds. The list totals nearly $500 million in items for FY 2020 (fewer affecting the current year, FY 2019), essentially offering a “menu” for legislative consideration. The range of an expected write-down of revenues may be as much as $350 million, but remains unknown until the State’s Board of Revenue Estimates meets in early March.

The two largest line items on the proposed list may also carry the most potential controversy: delaying cost-of-living adjustments for employee salaries and certain state reimbursements, and reducing general funds for debt service in an amount suggesting a one-cent increase in the state property tax (where the rate is set each year by the Board of Public Works).

Read the full DLS report online, or view the Appropriations presentation on the General Assembly website.

Michael Sanderson

Executive Director Maryland Association of Counties