Maryland's state government will have a general budget surplus that could be $200 million greater by the end of the month than fiscal analysts had expected, and Gov. Parris N. Glendening (D) plans to add the windfall to school construction projects, his spokesman said yesterday.
The strong economy that is driving up tax revenue also is swelling gas tax receipts, creating a $79 million surplus in the separate state transportation fund, said Glendening spokesman Michael Morrill.
"The economy is doing so well that the numbers across the board are better," he said.
The good news about a transportation fund surplus could undercut efforts in Annapolis to raise the gas tax to help fund road construction and other transportation needs. Glendening and legislative leaders are studying ways to raise hundreds of millions of dollars over the next five years for improvements to Baltimore-Washington International Airport, the port at Baltimore and major road projects, such as the Woodrow Wilson Bridge.
Transportation officials say that within two years, they will fall $200 million short each year of what they need to complete their goals. To close the gap, they are considering, among other solutions, an increase in the 23.5-cent-a-gallon gas tax or the 5 percent sales tax.
Republican lawmakers already have signaled their opposition to any tax increases at a time when the state has a surplus, and they have suggested using some of the general budget surplus on transportation.
Morrill said that Glendening was committed to using the budget surplus for education, and that the new transportation surplus did not adequately address long-term needs.
"It's a drop in the bucket compared to next year's spending alone," he said. "It doesn't come close to funding the shortfall the transportation budget is going to see in the next five years."
Glendening's intention to increase school construction is no surprise. He had pledged to spend $1 billion on new schools and classroom renovation before his term ends in 2002, and he also has said he wants to begin new construction projects on several college campuses. Morrill declined to discuss specific projects.
Earlier this year, budget analysts had anticipated that Maryland's budget would have a $249 million surplus when the fiscal year ends June 30, but Morrill said analysts now believe the total will be about $200 million higher than that, or roughly $449 million.
The flow of money has allowed Glendening to spend hundreds of millions of dollars on schools without having to borrow. Morrill said that the savings in interest payments allow the state to build six additional elementary schools for every $100 million spent.
"It's like paying for your house with no mortgage, and it allows you to do extra, and we've been doing the extras," Morrill said.