Maryland lawmakers close to resolving the state’s ‘structural gap,’ they say

December 13, 2012

A Maryland legislative panel agreed in concept Thursday to cut another $200 million from the state budget in the coming year, a move that analysts said would all but wipe out a “structural gap” that was projected at $2 billion just two years ago.

Lawmakers on the Spending Affordability Committee, which sets guidelines for coming budgets, patted themselves on the back during an afternoon meeting for having persisted in their efforts to end a practice of spending more than the state collects in taxes — a practice that was made far worse by the sour economy.

The changed outlook in the coming year is the result of past spending cuts and tax increases and the promise of growing gambling revenue, among other factors.

Lawmakers also got word Thursday that revenue collections are expected to be $161 million higher this year and next year than previously forecast — provided the federal government doesn’t go over the “fiscal cliff,” wreaking havoc on state budgets.

The bottom line is that the “structural gap” in Maryland’s $15 billion general fund is now forecast to be only $383 million in the coming fiscal year.

By a 17 to 3 vote, the Spending Affordability Committee agreed Thursday to trim $200 million from that figure when the General Assembly convenes in January for its 90-day session. The remaining gap is small enough to take care of itself in coming years, analysts said, suggesting economic growth and routine budget maneuvers would be sufficient.

“Three years ago, we started on this journey and never thought we’d accomplish it,” said Senate President Thomas V. Mike Miller Jr. (D-Calvert), a member of the panel, which includes members of both the House and Senate.

Lawmakers are required to balance the general fund every year on a cash basis. In recent years, they have relied on federal stimulus money, transfers from separate state accounts and other budget maneuvers to accomplish that.

John Wagner has covered Maryland government and politics for The Post since 2004.
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