Md. faces budget gaps for next four years

Local,Maryland,Ben Giles
ANNAPOLIS - Maryland is facing hundreds of millions of dollars of budget shortfalls over the next four years despite lawmakers' plans to raise taxes and shed teacher pension costs in a budget plan expected to pass the General Assembly on Wednesday.

The state Department of Legislative Services estimates lawmakers will have to stare down a projected $406 million budget gap in fiscal 2014, then a $526 million shortfall during fiscal 2015.

Those estimates take into account higher taxes on Marylanders earning at least $100,000 in taxable income per year and couples earning $150,000, reductions in income tax exemptions, and a shift of $710 million in teacher pension costs to local jurisdictions in the next four years.

Projected gaps
Fiscal yearShortfall
2014$406 million
2015$526 million
2016$484 million
2017$393 million
Source: Maryland Department of Legislative Services

The state Senate approved the budget proposal Tuesday afternoon. Delegates gave the plan their preliminary approval Tuesday evening and are expected to pass the budget Wednesday morning.

Though the shortfalls are smaller than what officials have dealt with in recent years -- Maryland faced a $1.1 billion deficit this year and a $1.9 billion deficit in 2011 -- the upcoming budget crises are no less troubling, according to Neil Bergsman, director of the Maryland Budget and Tax Policy Institute.

"That's a smaller number than any of the last five years, so on one hand that's a good thing," Bergsman said. "On the other hand, we've done all the easy stuff, so the next $406 million is going to be a lot harder than the last."

Lawmakers are out of ways to cut spending and raise taxes with the minimum possible impact on the state's residents, he said. To balance the budget for the next four years, Maryland senators and delegates will have to make cuts in "big money" sectors such as education, health and public safety, he said.

Republicans say the teacher pension shift will come back to haunt the state's efforts to cut its own spending by forcing local jurisdictions to foot the bill.

"All you've done is put the responsibility on the counties, and that's entirely wrong. It's fiscally irresponsible," said Del. Michael Smigiel, R-Caroline and Cecil. "If you have counties going bankrupt, who do you think is going to foot the bill? It's going to be the state."

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