ANNAPOLIS – Budget analysts warned Maryland lawmakers on Wednesday that the state is facing a $1.6 billion hole in fiscal 2012, which cannot be plugged without a drastic cut in services.
“There are some serious financial issues to be addressed,” said Warren Deschenaux, director of policy analysis for the Maryland Department of Legislative Services.
Among those issues:
• The state has reached its debt limit.
• The rainy day fund needs $30 million to stay solvent.
• The state’s teacher pension payments will grow 10 percent annually and its benefits contributions will grow 8 percent annually. The state is responsible for paying all teacher pension costs and roughly 60 percent of state employees’ health benefits out of its general fund.
• General fund revenues are projected to grow by roughly 5 percent annually between fiscal 2012 and fiscal 2015.
Officials from the department briefed members of the General Assembly’s budget and money committees Wednesday evening on the state’s budget gap.
“We are now seeing what it means to rely on outside money,” Deschenaux said in describing the deficit left by the loss of federal stimulus money.
