Unusual Maryland budget measure introduced with revenue woes on the horizon

This content was republished with permission from WTOP’s news partners at Maryland Matters. Sign up for Maryland Matters’ free email subscription today.

The leader of the House Appropriations Committee made an unusual procedural move Thursday in anticipation of a tight budget ― and a tight budget timeline.

Del. Maggie L. McIntosh (D-Baltimore City) introduced House Bill 1407, the Budget Reconciliation and Financing Act of 2019. Such a bill is typically introduced by the governor, but having a legislator do it is not without precedent, McIntosh said.

A BRFA is necessary this year because the Board of Revenue Estimates is expected to significantly write down revenue estimates next Thursday. The Appropriations Committee is expected to vote on the 2020 budget the next day.

Analysts think a revenue write-down of $200 million to $350 million is possible. This is after lawmakers were already seeking room in the 2020 budget to address what they characterize as a $62 million deficit and squeeze in a $325 million down payment on recommendations from the Kirwan Commission on how to improve state schools.

Department of Legislative Services analysts have recommended hundreds of millions of dollars in cuts this year, presenting Appropriations members on Wednesday with an additional $492 million in potential trims. The proposals included everything from a six-month delay in state employee pay raises to reappropriating budget-line surpluses in programs like Medicaid.

The committee could also consider ways to generate additional revenue, like cutting the general fund appropriation for debt service, a move that would force the Board of Public Works to increase the state property tax rate, David C. Romans, fiscal and policy coordinator for the Department of Legislative Service’s Office of Policy Analysis, told the committee.

“We tried to give you a very broad list so you have plenty of options,” Romans said.

McIntosh said the BRFA she introduced on Thursday – which required a special vote of the chamber to be referred directly to her committee – is currently a placeholder document that will allow the committee to quickly change or move around mandated and formula spending.

The forthcoming write-down is attributed to state tax losses from the federal government shutdown and lower-than-expected taxes on capital gains. One way lawmakers can close the budget gap is by decreasing the amount of money put aside in a new fund to smooth out volatility in capital gains taxes.

“There is a nervousness right now about our economy,” McIntosh said. “I firmly believe it is borne out of the instability of the Trump administration.”

McIntosh said the Appropriations Committee will do all that it can to avoid any cuts to legislative priorities: state employee wages and benefits, education, and crime-fighting efforts in Baltimore City.

This article was written by WTOP’s news partners at Maryland Matters and republished with permission. Sign up for Maryland Matters’ free email subscription today.

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