Gov. Martin O?Malley?s proposed budget meets the goals for restraining budget growth established during November?s special session, but it doesn?t completely solve the state?s structural deficit, the legislature?s top fiscal analyst told lawmakers in a preliminary analysis Monday.
“The pressure will continue to curtail the growth in spending,” Warren Deschenaux told the House and Senate budget committees. “The gaps remain for this session, and the next and the next.”
Senate Budget and Taxation Committee Chairman Ulysses Currie told reporters, “I think we have three months in order to gauge the economy and to work with the governor?s budget.”
Deschenaux said O?Malley did meet the three thresholds the General Assembly set at the same time it was raising $1.4 billion in taxes.
The governor reduced the growth in general fund spending and he also respected the limits set by the legislature?s Spending Affordability Committee, Deschenaux said. That committee?s recommendation, covering two-thirds of the total state budget was set at 4.27 percent, and O?Malley brought his spending plan in at 4.12 percent, Deschenaux said.
O?Malley?s budget also represented “a significant improvement” in the gap between expected revenues and spending, Deschenaux said. “By no way can we say that the problem is completely resolved,” though the special session had been called “to fix this problem once and for all.”
Economic forces could mean reduced revenues. One well-known problem is the 27th straight month of drops in home sales, fiscal analyst Theresa Tuszynski said. But despite increased unemployment claims, Maryland job growth has continued to outstrip the national economy, though employment growth has slowed in some sectors. There has also been 5.6 percent growth in personal income, Tuszynski said.
