ANNAPOLIS – Gov. Robert Ehrlich will have to cut more than $500 million from next year’s budget if he follows Thursday’s recommendation of Maryland’s Spending Affordability Committee.
The committee voted unanimously to set the budget growth rate at 5.7 percent. This would allow $850 million in growth, said legislative Director of Policy Analysis Warren Deschenaux, but it would also mean major budget cuts.
“If the revenue is basically what we’ve said, and the spending is held to this limit,” then it would necessitate around $550 million in cuts to Maryland’s general and special funds, Deschenaux said.
The Spending Affordability Committee was established in 1982 to ensure the state’s budget growth did not exceed the personal income growth of Maryland citizens.
Deschenaux stressed that Ehrlich was not bound by the 5.7 percent rate when forming his budget, but he would have to explain himself if he went any higher.
“The only requirement is that if the governor exceeds (the limit) then he has to include an explanation why,” he said.
The recommendation now goes to the Board of Revenue Estimates, which is scheduled to meet Wednesday. The board is responsible for making the official estimates on which Ehrlich will base his 2005 budget.
Maryland Budget and Management Secretary James “Chip” DiPaula Jr., who sits on the revenue estimates board with Comptroller William Donald Schaefer and Treasurer Nancy K. Kopp, said the board’s estimates will probably be close to the committee’s recommendations.
“I expect that it will be similar,” DiPaula said. “We’re still evaluating numbers.”
DiPaula said the governor realizes the final estimate will most certainly require budget cuts, and he is ready and willing to make them. The governor recently directed all state agencies to reduce their budgets by 12 percent.
“There will be significant cuts in spending,” DiPaula said, “because the governor is committed to returning the state to fiscal balance.”
– 30 – CNS-12-9-04