Maryland state spending is projected to increase at the fourth-highest rate in the nation next fiscal year, according to a report released Thursday.
A study by the National Governors Association and National Association of State Budget Officers shows that general fund spending will increase 11.2 percent from this fiscal year in Maryland, trailing just Florida, Minnesota and Iowa, respectively. Virginia ranks 21st with a 5.6 percent growth rate, while the nationwide average is just 2.6 percent.
State budgets have been hammered in recent years and have yet to recover to pre-recession levels, as many legislatures were forced to significantly slash spending to account for dwindling revenue.
Critics, however, say the report shows that Maryland is not doing enough to tighten its belt amid economic turmoil.
“Maryland continues to spend,” said Kimberly M. Burns, president of the Maryland Business for Responsive Government. “With the special session scheduled this fall, the NGA report serves as yet another reminder that our state doesn’t have a revenue problem, it has a spending problem.”
State officials are expected to devote millions of dollars more to the state’s ailing transportation network during the special session.
However, some said it was unfair to ignore recent concessions made by state lawmakers in closing a $1.6 billion shortfall for next fiscal year.
The Maryland General Assembly approved a $14.6 billion budget for the general fund that raises alcohol taxes and relies on a wide range of fee increases, as well as reducing employee pension benefits, to fill the massive gap.
“Unless the income increases, we’re not going to be increasing the outgo that much,” said state Sen. Karen Montgomery, D-Silver Spring, dismissing the report and adding that Maryland is facing “huge needs for transportation” that will require more taxpayer dollars.
Scott Pattison, executive director of the National Association of StateBudget Officers, said spending changes should be measured against population growth and per capita budgets, among other factors, to determine whether states were “being profligate or not.”
“The bottom line is, there are going to have to be tough choices made moving forward by elected officials, because money’s going to be tight,” he said.
The report cited Medicaid growth, state-mandated funding for certain categories — Maryland law requires local jurisdictions to spend the same amount per student as the year before, for example — and unfunded mandates as areas most likely to cripple state budgets in the near future.
Evaporating federal stimulus money also is a threat to state coffers, the study found.
Nationally, spending is expected to rise next year by 2.6 percent after rising 5.2 percent this year, the study found. The nearly $670 billion in state spending is expected to be $19 billion lower than fiscal 2008, a nearly 3 percent decline.
Maryland Gov. Martin O’Malley’s office was unable to comment on the report by Thursday evening.
However, the Virginia governor’s office said the study showcased a clear distinction between the commonwealth and other cash-strapped states in tackling budget crises.
Virginia has cut billions of dollars out of its budget over the past several years, butwas able to restore some funding during the 2011 General Assembly session when lawmakers marked up the state’s two-year, $80 billion spending blueprint.
“While some states have sought to survive this economic downturn by hiking taxes on their citizens and job creators, Governor McDonnell and Virginia have taken a different approach,” said spokesman Tucker Martin. “The governor and legislators have worked together over the past year and a half to reject tax hikes and responsibly reduce state spending. These fiscally conservative steps produced a budget surplus, and have positioned the commonwealth well for the years ahead.”
David Sherfinski contributed to this report.
