The state?s deficit is less than Gov. Martin O?Malley?s $1.7 billion estimate, which he made in the weeks leading up to the special session that?s under way in Annapolis, legislative analysts said Tuesday during a joint-committee hearing.
Warren Deschenaux, director of the legislature’s Office of Policy Analysis, put it this way: “$1.5 billion is the new $1.7 billion. But what?s a couple-hundred-million dollars?”
Deschenaux said his analysts have determined the state will spend $62 million less in 2009 than predicted by O?Malley and bring in $83 million more in revenue. Combined with about $280 million O?Malley shaved from the state budget earlier this year, lawmakers are looking to curtail a $1.4 billion shortfall, he said.
O?Malley is calling on lawmakers to reach consensus on his proposal to raise sales, corporate, tobacco and titling taxes in addition to income taxes for the state?s wealthiest residents. O?Malley also is backing a property-tax reduction and a public vote on his proposal to legalize slot machines.
The governor?s chief legislative officer, Joseph Bryce, told lawmakers Tuesday the governor would hold off on a property-tax reduction, a plan to expand health-care coverage to uninsured adults and a higher education funding source if a slot machine referendumis not approved.
In his opening remarks recently, O?Malley called the deficit “one of the toughest fiscal challenges in the state?s 373-year history.”
But some lawmakers said they believe the governor inflated the deficit to create a heightened sense of urgency.
Facing a billion-dollar deficit with a budget twice as small, lawmakers in the early 1990s were forced to cut Social Security aid to local governments, eliminate state-only Medicaid and cut cost-of-living adjustments for state employees for two consecutive years, Deschenaux told lawmakers in the session?s first day of hearings.
“We?ve had worse deficits and worse fiscal times,” said Delegate Mary-Dulany James, a Harford County Democrat. “That doesn?t mean it?s not a difficult situation. We?ve just seen worse.”
Analysts predict the gap between Maryland?s revenues and expenditures will narrow shortly after 2010, regardless of what happens during the special session, which is expected to last at least two weeks.
In the interim, the state will be forced to make additional cuts, said budget secretary Eloise Foster.
Join the discussion and take our poll in today’s examiNation Baltimore: How should legislators balance the state’s budget?
