Maryland budget forecast brightens

Budgets and BudgetingTravelAnalysts' CommentsAnnapolisDavid BrinkleyFiscal Cliff (2013)Frederick County (Maryland)

After years of budgetary gloom and shortfalls in the billions of dollars, Maryland's fiscal forecasters offered lawmakers a brighter outlook Tuesday, saying the state's operating budget could be just $27 million in the red next fiscal year.

Top fiscal analyst Warren Deschenaux told an Annapolis budget committee that it almost appears that next year's budget "could take care of itself." The last few years in Annapolis have been wrought with fiscal angst as lawmakers had to close budget gaps in the roughly $16 billion annual spending plan with spending cuts and tax increases.

"This is definitely a more positive direction," said Sen. Ed DeGrange, an Anne Arundel County Democrat who chairs the Spending Affordability panel.

The projections are rosier than they were even last month, in part because of increased revenue expected from allowing table games at the state's casinos — a measure approved by voters this month. Card games such as poker and blackjack are expected to be running — and bringing in state tax dollars — as early as spring.

Deschenaux warned lawmakers not to get too optimistic. "I would caution you not to pop any corks quite yet," he said.

The looming "fiscal cliff" in Washington — a series of automatic cuts and tax increases that could go into effect on the federal level if a budget agreement is not reached — could erase some of the Maryland gains. To insulate the state budget from the impact of those changes, Deschenaux suggested that lawmakers set aside a $200 million cushion beyond the state's so-called rainy day fund.

Finding that $200 million also would help to cover the long-term revenue shortfall known as the structural deficit, he said. "Then you could say you have wrestled the budget to the ground" and the state will have "something resembling a sound foundation for the next four years."

One dark spot is the state's transportation trust fund — a separate account used for roads, bridges, buses and trains. The $5.7 billion forecast for transportation spending is based on "optimist assumptions," according to the Department of Legislative Services.

For instance, financial analysts assume a "robust growth" in the titling tax that Marylanders pay when they purchase new cars — revenue that is unlikely to materialize if the economy remains soft.

Also, the transportation budget does not include costs for major projects on the horizon, including additional light rail lines in Baltimore and the Washington suburbs and a planned railway transit station in Baltimore.

The presentation led some lawmakers to speculate that the upcoming legislative session could include a round of new revenue increases dedicated to transportation funding.

"They've been building a case for [the gas tax] for 10 years," Sen. David Brinkley, a Frederick County Republican, said of Democratic leaders.

annie.linskey@baltsun.com

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