By David McNear Previously, we have provided a general overview of the state budget process as well as a more detailed discussion of the sources of the deficiencies that state lawmakers must address in the current session. We will conclude with an overview of Maryland’s capital budget as well as provide more detail on the operating budget Capital Budget Overview  Maryland’s Capital Budget funds the state’s Capital Improvement Plan.  In FY 2014, GO Bonds made up $1.1 billion, or 71% of the total $1.5 billion Capital Budget.  Capital projects for Agriculture, Environment and Natural Resources accounted for $486 million, or 31%, with Education/School Construction at $348 million, or 22%, and Higher Education projects at $352 million, or 23%.  (Click to enlarge) The Capital Debt Affordability Committee recommended $1.16 billion in GO Bonds for the upcoming Capital Budget.  Due to prior authorizations, including the public school construction set-aside, only $320.4 million…

By David McNear Previously, we provided an overview of the Maryland budget process and the economic conditions that will impact the options available to state lawmakers as they work to craft the FY 2015 budget. Today, we will delve deeper into the constraints that state lawmakers face in developing the budget for the coming fiscal year. To begin, legislators enter the session facing the need to make up for deficiencies that result from less-than-expected revenue collected during the previous fiscal year. We will discuss options for how state legislators can make up for these deficiencies. State Budget Outlook At end of 2013 session, the state’s structural budget deficit – the gap between ongoing spending and ongoing revenue – was projected at about $172 million, down from about $1.2 billion a few years ago, and the FY 2014 General Fund cash balance was projected at $294 million. One-time sources of money, like the…

In the coming days, we will be providing an overview of Maryland’s budget and budgeting process in advance of the release of Governor O’Malley’s FY 2015 budget, which is expected on January 15. Today we will start with a general overview of the budget process in Maryland and the economic factors that will set the parameters within which state lawmakers will craft the budget. Maryland’s Budgeting Process  The budget must be balanced – both the Governor’s budget, which must be introduced by January 15, as well as well as the final budget that the General Assembly passes in April  The Governor’s Budget will include an Operating Budget, which funds Local Aid, State Agencies and Entitlements, like Medicaid, and a Capital Budget, which funded $1.5 billion in capital projects such as school construction in the current FY 2014. The Governor may also introduce additional Supplemental Budgets later in legislative session.  These supplemental budgets…

Today marks the 50th anniversary of the War on Poverty, a set of federal policies that President Johnson announced in his 1964 State of the Union Address. This anniversary provides us with the opportunity to consider the impact and implications of safety net and social insurance programs at a time when poverty persists and inequality is increasing. Nonetheless, anti-poverty programs have significantly improved the lives of millions of Americans and have had important long-term benefits.   Building on the Great Society’s Legacy President Johnson’s original War on Poverty was part of his ‘Great Society’ initiative and included major programs such as Medicare, Medicaid, Head Start, federal funding for public education and college loans, and expanded and permanent food stamp program, and expanded social security benefits. Today, these programs are complemented by more recent policies that share the goal of reducing poverty and providing economic opportunity for the working poor. These…

This week’s news focused largely on the implementation of the Affordable Care Act in Maryland and the upcoming legislative session, which begins next week. Upcoming Legislative Session The Baltimore Sun reportedon the Howard County delegation’s predictions for the upcoming legislative session, which include: Efforts to address the looming $391 million structural budget deficit, which Delegate Guzzone worries will be especially difficult since state lawmakers have already gone after the ‘easy cuts’ when addressing budget deficits from previous years as cuts from Federal sequestration. Revisiting the stormwater fee – the Howard delegation’s Republican members have pre-filed bills to repeal it.  Raising the minimum wage “as part of a package with tax cuts, to make the deal more palatable to business owners. “The Capital Gazette reportedon potential proposals to amend or repeal the stormwater fee assessed at the county level. These proposals include delaying the fee, exempting nonprofits and churches, and offsetting…

Maryland’s unemployment rate fell to 6.4 percent (PDF) in November, according to data released today by the Bureau of Labor Statistics, after stalling at 6.7 percent for the previous two months. This is the lowest unemployment rate Maryland has seen in almost five years. The state unemployment rate fell in November because the number of employed Marylanders rose by just over 8,800 workers. The number of jobs in Maryland (these are two different measures-some jobs may be held by nonresidents, while some Marylanders may work outside the state) also went up, by roughly the same amount. While this is welcome news, Maryland’s economy still has a long way to go as it slowly recovers from the Great Recession. And the slow recovery is likely to continue: the Board of Revenue Estimates projected recently that job growth will continue to be sluggish in 2014 (PDF), at just 1.5 percent. Maryland lawmakers will have…

Yesterday, Maryland state lawmakers responsible for advising the Governor and General Assembly on spending levels for the state budget recommended that next year’s spending increase no more than 4 percent, from $37 billion to $38.5 billion. This relatively small budget increase is necessary to support inevitable growth in state spending to meet the needs of residents who, like the state itself, are still recovering from the Great Recession. Revenue Down in Short Term, Projected Up in Long Term The Spending Affordability Committee’s decision comes amid decreased revenue projections for the current fiscal year, but increased expectations for fiscal year 2015. The December Board of Revenue Estimates forecast that revenues for the current fiscal year will be $101.1 million less than expected, largely due to an economy that is still growing recovering from the Great Recession and hampered further by federal budget sequestration that kicked in at the beginning of 2013…

Over 82,000 Maryland residents will lose their unemployment benefits in 2014 if federal lawmakers do not act to extend them. Last week, federal lawmakers agreed to a two-year budget agreement prior to adjourning for the holiday break, but failed to reach agreement on extending unemployment benefits for those still looking for work amid a sluggish economic recovery. Maryland, like most other states, provides 26 weeks of temporary unemployment insurance to those that have lost their jobs. At the beginning  of the Great Recession began in 2008, Congress provided unemployed workers with additional benefits through the federal Emergency Unemployment Compensation program. But absent reauthorization, this program will expire at the end of the year. If Congress fails to act, almost 23,000 Maryland residents will lose benefits just after Christmas and another 28,500 will be cut off in the first six months of 2014. Further, absent reauthorization, those that lose their job…

Prince George’s and Montgomery counties recently moved in tandem (and with the District of Columbia) to increase incomes for hardworking residents by raising their minimum wage. State lawmakers should support these efforts by enacting a state-level minimum wage increase and authorizing the state Department of Labor, Licensing, and Regulation to enforce higher county-level minimum wage laws. In recent weeks, Montgomery and Prince George’s counties have joined the District of Columbia in raising the minimum wage for their low-income residents to $11.50 an hour by 2017. This coordinated effort helps low-income residents increase their earning power in an area characterized by a high cost of living, but is also emblematic of a movement of localities across the country that are making up for the failure of Congress and many state legislatures to help the minimum wage keep pace with increasing costs. (Click to Enlarge) Source: Economic Policy Institute Twenty states including…

Many Americans are still feeling the effects of the Great Recession, and the recovery thus far has been skewed toward the wealthy. As the economic and employment prospects of moderate and low income Americans remains tenuous, safety net programs for those who face economic hardship are increasingly important, but remain under attack. Yesterday, the Washington Post highlightedthe difficulties that moderate and low-income Americans continue to face in an uncertain economy. In an article that centered on the findings of a University of Virginia survey and others, the Post vividly described the anxiety that workers face, and how their feelings about their prospects have worsened over time. To summarize: Current Attitudes Comparison from Previous Surveys 54 percent of workers making $35,000 or less worry “a lot” about losing their jobs 37 percent of workers making $35,000 or less worried “a lot about losing their jobs in 1992 and 1975 85 percent…