ANNAPOLIS – Lawmakers who have spent months gearing up for difficult budget decisions finally got a nugget of good news: The Transportation Trust Fund may grow by about $300 million more than originally anticipated, according to the chief legislative analyst.
However, that is one of a very few bright spots that Warren Deschenaux brought to Wednesday evening’s meeting of the Spending Affordability Committee. While the economy seems to be rebounding, the recovery is not happening fast enough to change next year’s dismal budget forecast, including a deficit of at least $700 million.
Areas targeted for cuts to help balance last year’s budget, especially higher education and state government, are feeling the effects of those decisions.
Even the additional transportation funds amount to only “a sliver of the overall state needs,” said Secretary of Transportation Robert L. Flanagan.
The department, which has allocated most of its funding over the next six years for much-needed projects, will decide later how the projected additional money will be spent and will continue working with lawmakers to find new revenue sources.
“We want every legislator to know that his or her vote to enhance revenues for transportation will lead to projects in the district to improve the lives of the citizens they represent by fighting congestion and improving highway safety,” Flanagan said.
Flanagan will be seeking funding for what he says is a $1.8 billion funding gap that is partially the result of the state’s decision to borrow $300 million from the Transportation Trust Fund to balance the budget.
Although that is unlikely to occur again, the state may re-employ some other one-time fixes used last year, including raising bond limits to about $650 million, $100 million more than originally projected.
When the Debt Affordability Committee raised bonding limits to $740 million last year – an all-time high – it pledged to return them to their normal $500-million-level this year.
However, that wasn’t practical, said State Treasurer Nancy K. Kopp, who sits on the committee.
“We thought it was more appropriate to take care of the programs and projects that needed the funds this year . . . The recovery was put off by at least a number of months, it’s really a timing issue,” Kopp said.
The suggested bond limit still falls well within allowable limits, Kopp said.
The debt creates a long-term liability totaling $705 million, assuming a 5 percent interest rate.
One lawmaker said increasing the debt limit could be risky.
“I’m hesitant to see us increase our bonding. I know these are bad times but I’d be very reluctant to approve an increase,” said J. Lowell Stoltzfus, R-Somerset.
The committee also reviewed employment. Although the number of employees peaked in the past couple years, layoffs and eliminated vacancies have brought the number of positions back to 2001 levels.
And lawmakers heard new information about double-digit tuition hikes at the state’s higher education institutions. After last year’s cuts, the University of Maryland College Park ranks fourth in cost among the nations’ public universities but only 17th in quality.