Maryland budget analyst calls for a more cautious approach than O’Malley’s proposal

A top budget analyst urged Maryland lawmakers on Monday to take a more cautious approach toward state spending than that taken by Gov. Martin O’Malley (D) in his proposed budget, saying the governor’s proposal lacks a sufficient cushion to cover unforeseen expenses and relies on other potentially risky budgeting strategies.

Warren Deschenaux, director of the Office of Policy Analysis in the Department of Legislative Services, said O’Malley’s proposed budget would leave only a $30 million ending balance, a sum which might not be enough to meet unexpected deficiencies.

In the current fiscal year alone, for example, the state has encountered $112.3 million in unanticipated costs, including an additional $28.4 million to fix the state’s crippled health care exchange. In recent years, for example, annual budget deficiencies have averaged $145 million.

Deschenaux urged lawmakers to aim instead for a $100 million ending balance in the fiscal 2015 budget, in addition to $800 million socked away in the rainy day fund.

O’Malley last week unveiled a $39 billion budget that offers no significant new initiatives but aims to reduce a long-running structural deficit without new taxes at a time when the state’s economic outlook remains uncertain. O’Malley’s budget also includes $4.3 million toward full-day, universal pre-kindergarten and nearly $290 million for school construction.

Several factors have clouded the budgetary outlook, Deschenaux said, including the possibility that the state will have to pay for private defenders to represent indigent defendants at their initial bail hearings, a cost he estimated at $30 million a year. He also expressed concern that the state’s income from selling aging Medevac helicopters might fall short of the $18 million estimate and warned that gambling revenue — estimated at $541 million — is uncertain and often hard to predict.

Deschenaux and other policy analysts called attention to other concerns, such as a large number of one-time fixes and perhaps overly optimistic assumptions. Lawmakers also expressed concern about the governor’s proposal to reduce the $300 million pension reinvestment by $100 million, thereby increasing the retirement fund’s liabilities.

Deschenaux said that the governor’s plan has narrowed the state’s structural deficit but that a $210 million gap between revenue and spending remains.

“That’s very close but not quite there,” he said.

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