The good news is that state revenues for the next 15 months are only $50 million less than originally expected, said Comptroller Peter Franchot, and the forecasts of $13.4 billion for next year are “fundamentally unchanged.”
The bad news is the same, Franchot said ? the estimates for the coming years are basically accurate.
“That forecast is not exactly cause for celebration,” Franchot said. “We will not be able to grow our way out of the structural deficit mess we find ourselves in,” and Maryland needs to come up with long-term solutions. Current estimates put those deficits at more than $1 billion a year.
Solutions mean tax increases or spending cuts. The $166 million the House Appropriations Committee is proposing to cut from Gov. Martin O?Malley?s $30 billion budget ? one-half of 1 percent ? suggests whacking programs won?t be easy. That?s what Senate Republicans proposed Friday, but not what Democrat officials are inclined to do.
Senate President Thomas V. Mike Miller said the situation is so bad that slot machines should be approved and taxes raised in the next four weeks. Otherwise, by August or September, “the governor is going to have no alternative but to call a special session” to fix the problem, Miller said.
“We need to take a hard look at our tax structure,” O?Malley Budget Secretary Eloise Foster said at Friday?s meeting of the Board of Revenue Estimates Franchot chairs.
“Obviously we are out of the great growth period” of the last two years,” State Treasurer Nancy Kopp said. “We?re going to have to address a serious structural imbalance” and find new revenue sources that mirror the economy.
O?Malley and Foster have repeatedly made clear they want to take some time to get firm control of the state government, see where they can find “efficiencies,” and then work with the legislature to come up with higher tax revenues.
“We have to be clear that everything is on the table,” Foster said.
That?s the approach that House Speaker Michael Busch favors. “He ought to have a year to figure this out,” Busch said this week. “I see the legislature as a partner” in the process, but “the governor has got to put together a package. The lead horse is the governor.”
