Comptroller Peter Franchot will call for “a top-to-bottom review of state spending to ensure taxpayers are getting the most for their dollar” in a letter to Gov. Martin O’Malley and other state leaders, according to a preview of a speech he will give in Montgomery County on Monday.
Franchot spokesman Joseph Shapiro said Franchot believes “Maryland needs to pursue a spending management initiative similar to what Virginia did to manage the state’s purchasing of vital goods and services, achieve greater economies of scale and increase efficiencies.”
Franchot is bringing in business experts to discuss what’s happening in their industries after Tuesday’s release of official figures at the Board of Revenue Estimates, of which he is chairman.
Legislative analysts and Franchot are expecting tax revenue forecasts to be revised down.
The forecasts determine how much the state is allowed to spend to achieve the required balanced budget.
O’Malley told The Examiner on Friday that his administration has been tracking “the economic downturn and the effect it has on the state revenues. We are having to make cuts, make spending reductions,” but they are likely to be in the order of the $50 million in cuts he made in June.
“It’s true in every state in the nation,” O’Malley said, but the tough choices to reduce growth in spending by $1.5 billion and increase taxes by $1.5 billion have been made.
He said the budget approved by the legislature also left enough in the rainy-day fund and unallocated surplus — about $1 billion in total — to cushion any need for more drastic cuts in social services or education.
“Nobody can really predict with certainty when we will reach the bottom of this economic downturn,” O’Malley said.
But “Maryland will be coming out of it sooner than other states,” he said.
“Hopefully, the election comes and people will start feeling a little more optimistic about the future and our revenues will rebound.”
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