- Associated Press - Tuesday, October 25, 2016

ANNAPOLIS, Md. (AP) - Maryland lawmakers who steer state spending need to “get real” about addressing shortfalls, the legislature’s chief budget analyst said Tuesday, warning that the state appears to be in a period of sluggish economic growth with no major lift in sight.

Warren Deschenaux, a longtime fiscal adviser to legislators, said they typically have responded to budget shortfalls with short-term budget-balancing solutions while waiting for good times to return and solve their problems, instead of fundamentally changing the way Maryland estimates how much money it will have and the way it spends that money.

“This time I think is different,” Deschenaux said. “This time, it’s all on us. Our failure to accurately forecast the behaviors of our most wealthy taxpayers and the future of the stock market has caused us to recognize the gap that we see today, but at the same time we also have to look at what’s driving our spending upward and adjust what we can to adapt to what appears to be a period of limited economic growth.”

He compared the way lawmakers handled past recession-year shortfalls to the 1993 movie “Groundhog Day,” a film about a jaded weatherman forced to relive the same day over and over.

To break that cycle, he said, “… we just have to get real, and one of the things we have to get real about is, for the time being anyway, we are in a period of comparatively slow economic growth, and we need to trim our sails in order to accommodate that.”

Last month, Maryland officials revised state revenue projections down by $356 million for the current fiscal year, which began July 1. They also reduced revenue projections for the next fiscal year by $418 million.

“I think this time we don’t have a recession to attribute our issue to. It’s simply the normal variation in our ability to see the future, and we need to get real, and getting real means not counting on and budgeting up to every possible dime,” Deschenaux said. That requires discipline, he added.

Republican Gov. Larry Hogan’s administration said the meeting underscored the need for spending reforms.

“From day one, Gov. Hogan has been addressing Maryland’s longstanding budget issues and working to rein in mandated spending,” said Amelia Chasse, a spokeswoman for the governor. “We will continue to work with our partners in the legislature to finally return commonsense budgeting to our state.”

The downward revisions reflect less-than-expected tax collections due to a sluggish economy.

“On the revenue side we are very vulnerable to unpredictable swings in revenues from our principal general fund revenue source, and that’s personal income tax,” Deschenaux said. “A lot of the revenue that comes into the personal income tax comes from a surprisingly small number of taxpayers.”

State budget analysts plan to submit a suggestion to lawmakers to mitigate the revenue swings next month.

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