- The Washington Times - Tuesday, October 18, 2005

ANNAPOLIS — A dramatic increase in tax revenues the past two years should keep the state budget well in the black for the next two to three years, the General Assembly’s fiscal committees were told yesterday.

But Warren Deschenaux, the legislature’s chief fiscal adviser, warned that the good times aren’t expected to last.

“Easy come. Easy go. It can go very fast,” he said.

A rapid increase in revenues is the result of a number of factors, including strong growth in personal income, soaring property values and a strong housing market. As a result, state revenues for the fiscal year that ended June 30 were about $1.2 billion higher than the year before.

The briefing by Mr. Deschenaux and his staff was given to the four legislative committees that deal with the budget and spending issues, as well as to the Spending Affordability Committee. That committee will meet next month to recommend a limit on spending for the budget that Gov. Robert L. Ehrlich Jr. will present to the General Assembly in January for fiscal 2007, which begins July 1 of next year.

Mr. Deschenaux said that based on projections for growth in revenues and growth in spending, the state should have about $1.5 billion in surplus funds for the 2007 budget, including the rainy-day fund that is maintained to help Maryland keep its AAA bond rating.

Delegate Norman Conway, Wicomico Democrat and chairman of the House Appropriations Committee, said that despite the huge surpluses projected in the short term, the governor and legislature need to be cautious about spending money.

“Things can change very quickly,” he said. “While [revenues] are great right now, they could suddenly become a major problem.

“There are still some things out there we have to be very cautious about.”

The big surplus now building in the state treasury will make it easy for Mr. Ehrlich and the legislature to keep a commitment in 2007 to fund the next-to-last step of the $1.3 billion Thornton school-aid plan. Mr. Ehrlich will have to include between $480 million and $552 million in additional aid in the 2007 budget to keep the Thornton commitment.

Another beneficiary of the state surplus could be land-preservation funding, which took a big hit over the past four years as the state struggled to close budget deficits resulting from the downturn in the national economy.

Funding for programs that preserve undeveloped land totaled only about $74 million for fiscal 2003, 2004 and 2005 combined. Spending is budgeted at about $126 million this year, and Mr. Deschenaux said Mr. Ehrlich will have almost $325 million available that he can, if he chooses, use to protect open space in next year’s budget.



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