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Red Ink, Revenue Shortfalls Will Dominate 2009 General Assembly

[ Return To Senator Roy Dyson's Newsletter ]

Posted on January 09, 2009:

Senator Dyson When the 2009 Maryland General Assembly convenes on January 14, it will face a $2 billion budget deficit. A recession economy, the housing market, rising unemployment and shrinking consumer spending continue to undercut every state revenue source.

In December, the Spending Affordability Committee made it lowest recommendation on budget spending increases since its establishment in 1982. The Committee recommended that Governor O'Malley keep spending increases to 0.7% or $146 million. It also recommended cutting 1,000 of the 3,340 vacant state positions.

Watching the economic downturn gather steam and in the face of declining revenue, Governor O'Malley has already made cuts of $300 million in the current budget.

Just about every state, including Maryland, is struggling with falling revenue and rising needs of its citizens. Maryland, along with the other states, is hoping for federal funds to help avoid fiscal catastrophe. We should know by early February if federal help will materialize.

A contributing factor to Maryland's continuing budget deficit is the state's habit of spending more money than it has. It is a bad habit that the state cannot seem to break. For example, the General Assembly met in special session in November 2007 to address a $1.7 billion budget deficit. At the root of that deficit was the passage of the Thornton education plan in 2002 to significantly increase spending on education. The problem was that the state was approved Thornton without any money to fund it. To me, passage of Thornton was as fiscally irresponsible as a state could get. It was for that reason that I opposed Thornton.

In the November 2007 Special Session, I also voted against state's largest tax increase in its history. To add insult to injury, while balancing the budget with a $1.4 billion tax increase, the special session also approved increased funding for Chesapeake Bay cleanup…an additional $400 million for road maintenance and new projects and a 5-year program to expand Medicaid to insure 100,000 more adults and give small businesses subsidies to enable them to provide health insurance to their employees. These spending increases were based on projected revenue increases that have not materialized. While digging the state's way out of a mammoth budget deficit, the state simultaneously increased transportation, health care and environmental spending. In short, once again, the state was spending money it did not have.

And guess what? We now find ourselves facing the second huge budget deficit in two years. The definition of insanity is doing the same thing over and over again and expecting different results. By that measure, Maryland's spending habits are insane.

Now for the first time in decades, the state is considering deep budget cuts in usually untouchable programs and services. Some of the cuts already enacted or being considered:

-- Require state employees to take 2 to 5 days of unpaid leave for a savings of $34.4 million.

-- Cut the Geographic Cost of Education Index (GCEI) funds to the less wealthy counties to save $38 million.

-- Reduce operating and bond funds of the University System of Maryland for a savings of $30 million.

-- Reduce state support for Community colleges to save $16.3 million.

-- Reduce state support for Maryland private colleges for a savings of $8.4 million.

-- Reduce state scholarships and financial aid for needy students by $1.8 million.

-- Freeze child care subsidies for working poor to eliminate 2,500 children to save $5.3 million.

-- Cut community mental health services by 1% to save $3.6 million.

-- Cut 25% of monthly temporary disability assistance to save $4.6 million

-- Cut $2.5 billion from the transportation budget over the next six years. This is in addition to $1.1 billion in reductions made in September to transportation's six year $10.5 billion program.

The 2009 session promises to be a painful one. One can only hope that the lesson learned is that the state must let its revenue resources determine its spending. There will be no money for new programs in 2009. Raising taxes again is or should be out of the question. No question about it, balancing the budget will be the dominate issue in 2009.

I will be attending to my Legislative duties in Annapolis during the next 90 days. During that time, I will be available on Mondays for meetings, and my Great Mills office will be staffed on Mondays and by Appointments.

I encourage citizens to contact their Representatives and voice their thoughts and opinions about issues that are important to them. I look forward to hearing from you. I always take what I "hear from back home" to Annapolis when I vote on any legislation.

When you contact me, please include your mailing address, and above all please print or write legibly. If I can not read your correspondence, I cannot respond to your request. If you leave a voice mail message, please be sure to include a telephone number for a returned call.

My staff and I am as close as a telephone call away. My toll-free number is 1-800-492-7122, Ext. 3673. You may also leave a message in my Great Mills at 301-994-2826, as messages are checked frequently.

[ Return To Senator Roy Dyson's Newsletter ]

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