ANNAPOLIS — State leaders fixed most but not all of Maryland's budget problems during a special General Assembly session in November, budget analysts told lawmakers yesterday.
State lawmakers during the three-week session closed most of the long-term budget problems by raising $1.4 billion in taxes and cutting spending by $550 million.
But they still must close the long-term gap between increases in spending and increases in revenue, the analysts said. They also said the slowing economy could reduce state revenue and create a new budget gap.
"We're not there yet," said Delegate Norman H. Conway, Eastern Shore Democrat. "I think we need to keep that before us."
Gov. Martin O'Malley, a Democrat, submitted a $31.6 billion budget last week that increases total spending by 6 percent and spending controlled by lawmakers 4 percent, but does not completely close a long-term budget gap.
"It does represent a significant improvement in the financial position than that which faced the state in fall," said Warren G. Deschenaux, the Assembly's chief budget analyst. "By no means can we say the problem is completely resolved, but I think it is easier to envision a happier ending for the general fund than there was six months ago."
Much of the additional revenue needed to close the remaining budget shortfall would come from 15,000 slot machines proposed for five locations. Lawmakers approved the plan by Mr. O'Malley during the special session. However, Maryland voters will make the final decision on November's ballot.
Senate President Thomas V. Mike Miller Jr., Southern Maryland Democrat, has called slots the "third rail" of the budget solution and has predicted voters will approve it handily.
The Democrat-controlled Assembly also cut spending by about $550 million during the special session, but members increased spending on health care, transportation, higher education and the Chesapeake Bay by at least $700 million annually.
Budget analysts from the state's Department of Legislative Services also cautioned lawmakers about the state's economic outlook, echoing statements by Comptroller Peter Franchot.
Among the concerns are that home sales and median home prices have fallen significantly, while long-term unemployment claims have begun increasing. However, analysts acknowledged Maryland has not had the high unemployment levels seen nationwide.
The analysis was delivered on the same day Mr. O'Malley formally filed his 2008 legislative package, with proposals to increase DNA collection, divest state funds from Iran, place speed cameras throughout the state and direct $50 million in increased spending on Chesapeake Bay cleanup.
The governor also formally filed legislation to better track criminal suspects and juvenile offenders.
This is the second budget in Mr. O'Malley's four-year term.
He also increases spending on public safety, juvenile services and the environment, while programming new spending on transportation projects over the next five years, including the Intercounty Connector and the Metro Purple Line.