The state is facing a $1.5 billion deficit next year partly because two-thirds of the budget is driven by funding mandates, entitlements and spending formulas that increase automatically due to legislation, enrollments and inflation, analysts told lawmakers Thursday.
“We?re going to have to take a long hard look at mandates and formulas,” said House Appropriations Committee Chairman Norman Conway, D-Wicomico. “We cannot let the spending line continue out of control.”
Conway suggested legislators need to refocus priorities and look at requirements, particularly the automatic inflation adjustment built into big spending programs such as school aid. “Some of the sizable increases in inflation were not anticipated,” Conway said.
Policy analyst Mark Collins said inflation adjustments for the Thornton school aid formula based on what local governments must buy ? not the Consumer Price Index ? were estimated at around 3.5 percent but are now running at 5.2 percent, adding more than $70 million to the fiscal 2009 projected deficit. The overall inflation adjustment for all the education formulas is $153 million, Collins said.
Republicans in both the House and Senate favored slowing the growth in Thornton aid.
After the hearing, Del. Steve Schuh, R-Anne Arundel County, who helped develop a Republican plan based on slot machines and spending cuts, said, “We?re starting to see the beginning of a lot more fiscal realism.”
Del. Barbara Robinson, a Baltimore City Democrat, said there should be more monitoring or oversight.
