Growing receipts shrink budget shortfall

October 20, 2004|BY A SUN STAFF WRITER

Maryland's projected budget gap has shrunk by more than $600 million since June because of higher-than-expected tax revenues, legislative budget analysts said yesterday.

Analysts told lawmakers and the state Spending Affordability Committee that the gap between revenues and expenses in the budget Gov. Robert L. Ehrlich Jr. is preparing to release in January is now $388 million, down from a projected $1 billion a few months ago.

Ehrlich must submit a balanced budget, so some spending cuts are expected. The governor has ruled out new taxes as a way to balance the state's books.

In December, the affordability committee will make a final recommendation of how much Maryland's $23.6 billion budget can grow next year. The committee studies revenue projections and makes a recommendation that by law does not exceed the projected personal income growth of state residents.

The state's problems are not over, analysts said, because spending on education and other mandated programs will still grow faster than tax revenues.

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