State Faces Shortfall Of $700 Million

July 10, 2009|By Laura Smitherman

Maryland's fiscal year has barely begun, but the state legislature's chief budget analyst is warning of a $700 million shortfall, or about twice the previous estimate.

Gov. Martin O'Malley soon will present to the Board of Public Works a series of spending reductions to the budget for the year that began July 1, though it is unclear how deeply he will cut.

Several states with balanced budgets earlier this year now face shortfalls because of declines in tax receipts, according to In Maryland, officials have repeatedly pared the budget in recent years as the economy declined.

Warren G. Deschenaux, the General Assembly's chief fiscal analyst, said in a letter to legislative leaders that funds carried over from last fiscal year that were supposed to help balance this year's budget are essentially wiped out. That plus another $400 million decline due to deteriorating tax receipts could total about $700 million, or 5 percent of the budget.

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