Revenue Estimates Expected to Decrease, More Budget Cuts Possible


ANNAPOLIS (March 10, 2009)—Updated revenue estimates scheduled for release Wednesday are expected to be significantly lower than initial projections and could lead to as much as $400 million in cuts to the state budget, lawmakers said Tuesday.

Less than three weeks ago, Gov. Martin O'Malley scrapped millions in budget cuts in anticipation of an injection of federal stimulus money. But the revised revenue projections will force O'Malley to adjust the soon-to-be-released supplemental budget for fiscal year 2010.

?The continued erosion of revenue estimates due to the national recession greatly changes the Supplemental Budget we had hoped to submit when the Recovery and Reinvestment Act was signed into law by President Obama,? O'Malley said in a statement.

Until the official numbers are released during Wednesday's Board of Revenue Estimates meeting, lawmakers say it's hard to judge how the budget might be affected.

"We're talking anywhere from 'we're okay' to $400 million in additional cuts," said Delegate Murray Levy, D-Charles. "We may wind up with a lot of additional work."

The House Appropriations Committee has halted its consideration of 2010 budget proposals in light of the pending revenue write downs.

"Until we get the figures, we're going to postpone our decision making," said Chairman Norman Conway, D-Wicomico. "We may very well have to go back and revisit some of the things we've been looking at."

Conway said O'Malley and House and Senate leadership should meet and discuss potential budget solutions in light of declining revenues.

On Feb. 20, O'Malley announced the passage of the federal stimulus package negated the need for 700 state employee layoffs and spared public schools from deep budget cuts.

An O'Malley spokesman said it's too soon to look at specific impacts of the revenue decreases. But the federal money O'Malley plans to use to fund several state education programs is not in jeopardy since the stimulus package designated that money for educational purposes, said Shaun Adamec, the spokesman.

While Adamec acknowledged tax revenue estimates will be down, he also noted the stimulus package hasn't had time to pump life into the economy and encourage spending.

"Many of those investments haven?t even been made yet," Adamec said.

Last week the Board of Public Works, which consists of O'Malley, Treasurer Nancy Kopp and Comptroller Peter Franchot, announced $82 million in cuts to this year's budget, including eliminating 894 state jobs, all but two of which were vacant. The board also cut $345 million from the fiscal 2009 budget last October.

Capital News Service contributed to this report.

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