Rather than cutting critical agencies or programs, Moran suggested the General Assembly resurrect a corporate tax law proposal known as "combined reporting" that's aimed at preventing big companies from hiding profits out of state but that's roundly opposed in the business community. Moran also suggested scrubbing privatization efforts to revert some jobs back to the existing state workforce to save money.
O'Malley declined to detail specific cuts that he's considering but indicated it would be "impossible" to fully preserve budgeted spending for education, health and public safety because those areas comprise such a large part of the budget.
As the economy contracted over the fiscal year that ended in June, the Board of Public Works approved more than $400 million in midyear cuts over several meetings. The panel, which includes O'Malley, Comptroller Peter Franchot and Treasurer Nancy K. Kopp, will consider the latest cuts just three weeks into the new fiscal year.
A state revenue report released Thursday illustrates the problem. Overall, tax receipts and other revenues are down nearly 6 percent to about $12 billion for the last fiscal year, though not all collections have been counted. Most notably, individual income taxes were down and refunds were up, so the revenue stream is expected to come in $300 million below expectations.
Because a fund balance that was supposed to carry forward to help balance this fiscal year has largely disappeared, and because the economy is projected to continue to slide, officials expect about $700 million in budget cuts will be needed.
"The national economic recession is still savaging our state economy and revenues," Franchot said in an online chat about the economy. "We are seeing a record drop in revenues across the board."
Franchot, who was asked by online commentators about the state budget, repeated his call for a top-to-bottom review of spending to identify waste. One commentator named Jose noted: "Money is tight everywhere. How much did it cost to revamp your website?"
Franchot explained that his Web site overhaul was done "in house, with existing staff and resources." He added: "Like families and businesses across Maryland, we are tightening our belts in the Comptroller's office and working creatively to do more with less."
