Fiscal Briefing Provides Quick Look at Governor’s Fiscal 2021 Plan

The Department of Legislative Services presented its annual fiscal overview to the budget committees of the General Assembly this week. The briefing provides an overview of the Governor’s fiscal plan, an economic and revenue outlook, and details on key aspects on the proposed operating budget.

A “quick look” at the proposed $47.9 billion budget, of which $19.7 billion is General Funds, leaves a general fund balance of $414.4 million at the end of fiscal 2020 and $108.5 million at the end of fiscal 2021. The Rainy Day Fund ends fiscal 2021 with a balance of $1.2 billion.

To balance the budget, the Administration has introduced a Budget Reconciliation and Financing Act (BRFA) that reduces general fund spending by $530.6 million and generates $157 million of revenue.

An article in Maryland Reporter describes reductions in the BRFA to balance the budget.

That includes slowing the growth of community college funding but cutting in half a formula-driven 15 percent increase for 2021 and slowing the formula’s growth in future years as well. By fiscal 2025, the changes to the formula would divert about $100 million in funding from the state’s community college programs. The act also proposes freezing the funding formula for nonpublic colleges in 2021 and slows future growth of that formula as well.

A third provision of the act would also slow proposed rate increases for developmental disability and behavioral health providers. Lawmakers proposed a 4 percent rate increase for 2021, which the Hogan budget would cut back to 2 percent.

Because those cuts are in the Budget Reconciliation and Financing Act, lawmakers can restore the funding, but would need to identify other revenues or savings to balance the budget.

House and Senate budget committees will begin holding hearings on agency budgets and crafting their own budget plans. According to the General Assembly’s calendar, the fiscal 2021 budget is to be passed by both chamber by March 30.


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