The budget shortfall for the next fiscal year in Maryland is not as large as originally projected, the chief legislative analyst told a joint panel of state lawmakers on Tuesday.
Warren G. Deschenaux, executive director of the Department of Legislative Services, said the anticipated budget gap of about $740 million has been reduced to $250 million.
He said bond premiums, overestimates in health-care costs for state workers, a reduction in the Medicaid caseload and recent budget cuts made by the Board of Public Works accounted for the lower projection.
"The outlook is better than I expected it to be," Deschenaux said.
To cover the smaller shortfall, he suggested that the General Assembly consider "freezing everything at current levels" except for mandated spending such as K-12 education and reimbursements for care providers who work with the disabled.
While the news was rosier than in previous years, analysts noted that the forecast did not include the devastating impact that federal changes to health care or the tax code could have on state revenue.
And analysts suggested that the state continue to look closely at the continued fall in sales-tax revenue, largely a result of consumers relying more on online commerce as well as the effect of an aging population that has different spending patterns.
For fiscal 2019, the lion's share of the change in the budget gap comes from the state's getting more than expected in bond premiums, Deschenaux said.
Del. Maggie L. McIntosh (D-Baltimore City), chair of the House Appropriations Committee, asked whether the expected bond premiums should be included in the fiscal outlook. But Deschenaux said the projection, like estimated revenue from sales taxes, is always a part of the forecast.
A move by Gov. Larry Hogan (R) to cut spending from the state's current budget freed up $61 million to plug the shortfall, Deschenaux said.
Last month, the Board of Public Works approved the $61 million budget cut, which included reducing health department spending by $22 million, eliminating 30 positions at public higher education institutions to save $8 million and cutting more than $8 million from the Department of Public Safety and Correctional Services.