Spending Affordability -Sets Spending Limit, Steps to Mitigate Structural Deficit

The Spending Affordability Committee met yesterday to make its recommendations to the Governor and General Assembly to guide budget discussions for the upcoming fiscal year. While its primary responsibility is to establish a level of spending for the State operating budget that is reflective of the current and prospective condition of the State’s economy, the Committee also makes other budgetary recommendations to guide actions during the upcoming session.

Recommendations include:

  • maintaining a structural balance in the general fund for fiscal 2020 and limiting growth in the general fund budget to no greater than 3.75% over appropriations approved at the 2018 session;
  • with the exception of actions taken on the recommendations of the Commission on Innovation and Excellence in Education, minimizing the impact of legislation passed at the 2019 session on the structural deficit forecast for fiscal 2021 and subsequent years;
  • to address out-year budget challenges, prioritizing the preservation of cash reserves at the 2019 session through the following:
    • a minimum ending fiscal 2020 general fund balance of $100 million;
    • a Rainy Day Fund balance of at least 6.0% of general fund revenues; and
    •  the allocation of any remaining cash balances to reserves and one-time spending;
  • establishing a new general obligation bond authorization of $1,085 million for the 2019 session and limiting out-year annual authorizations to 1% growth;
  • establishing a higher education debt authorization of $34 million in new academic revenue bonds for the University System of Maryland;
  • changing the date for when the Capital Debt Affordability Committee makes its recommendations from on or before Oct 1 to no later than October 20; and,
  • authorizing a one-grade increase for correctional officer salaries to improve recruitment and retention.

Spending Affordability Report

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s