Maryland state budget (2009-2010)

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Maryland had a total state debt of $40,615,471,801 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.[1]

State budget for FY 2010

Maryland ended FY 2010 with a balance of $344 million, $183.7 million more than projected.[2] Although those figures represent one of the worst financial performances by the state in four decades, and a year-over-year decline of 3.7%, the state still outperformed expectations of analysts.[3]

The state ended the fiscal year $300 million in the black, which was as much as $150 million greater than expected as the result of higher second-quarter sales tax and income tax withholding revenues. As The Baltimore Sun noted, "In the context of a $32 billion state budget, it's a relatively paltry sum."[4] It added, "To suggest it's a surplus is like saying your checking account has a $1,000 surplus on July 30 while ignoring the $1,200 mortgage payment that's due Aug. 1. It's more like a cash flow anomaly that momentarily holds off a sea of debt."[4]

Gov. O'Malley cut $736 million in spending for FY 2010 to balance the budget in two rounds over the summer; $282 million on July 22, 2009 and $454 million on August 26, 2009. The reductions were 60% from state agencies, 29% from local aid, and 11% from employee salary and benefits.[5] Maryland's general fund was $13.6 billion in FY 2007 and a little below $13.2 billion for FY 2010 after the reductions. FY 2011 projections predicted a $1 billion shortfall.[6]

FY 2010 general fund spending percentages after reductions[7]

K-12 39.2%
Health 22.2%
Rest of state government 19.3%
Higher education 10.2%
Public safety 9.1%

The Board of Revenue Estimates (BRE) released lowered revenue estimates in September 2009, $682.8 million lower than the March 2009 projections on which the FY 2010 state budget was based. The latest BRE projections anticipated revenues to be $12.314 billion for FY 2010 and $12.734 billion for FY 2011.[8]

Budget background

See also: Maryland state budget

The Maryland General Assembly meets each year for 90 days, convening in 2009 on January 14 and adjourning on April 13. The 2010 session would convene on January 13, 2010.[9]

Maryland's fiscal year begins July 1 and ends June 30 of the following year. Every year around August or September the Department of Legislative Services develops the fiscal forecast for the year in order to help create a balanced budget for the next fiscal year. In August the state's individual agencies submit budget requests and between October and November the governor holds hearings with each agency. By the end of December the governor completes a budget recommendation, which is presented to the Legislature on the seventh or tenth day of session in January. Both the House and the Senate must pass the bill, after making any necessary amendments. The legislature gets final say on the budget. The governor lacks any veto authority with respect to the budget as passed.[10]

Created in 1945, the Board of Revenue Estimates is concerned with revenues that will fund state government (Chapter 991, Acts of 1945). The board reviews the findings and recommendations of the Bureau of Revenue Estimates. The board then sends to the governor, for submission to the General Assembly, an itemized statement of estimated revenues for the current and next fiscal years. The board had three ex officio members: the Comptroller of Maryland, the State Treasurer, and the Secretary of Budget and Management. The Director of the Bureau of Revenue Estimates, David F. Roose, serves as Executive Secretary (Code State Finance and Procurement Article, secs. 6-101, 6-102, 6-106).[11]

Budget figures

Maryland had lowered state spending $434 million below FY 2007 levels, cut $4.3 billion, and eliminated 3,200 state positions since Gov. Martin O'Malley took office in 2007.[12]

The following table provides a history of Maryland's expenditures and gross domestic product (GDP).

Fiscal year Expenditures (billions) GDP (billions)
2000 $30.6[13] $180.4[13]
2001 $33.2[13] $192.7[13]
2002 $35.7[13] $204.1[13]
2003 $37.1[13] $213.3[13]
2004 $38.5[13] $228.2[13]
2005 $41.4[13] $243.9[13]
2006 $44.2[13] $257.6[13]
2007 $47.3[13] $268.7[13]
2008 $50.7[13] $280.3[13]
2009 $54.3*[13] $292.4*[13]
  • NOTE: The figures for FY 2009 had not been finalized at the time this data was compiled.

2009-2010 budget crisis

  • Education funding: Maryland's 24 school boards stood to lose up to 5 percent of their local funding in the coming year as legislators debated ways to let county governments reduce levels of education spending. Sen. Ed Kasemeyer (D-Howard and [[Baltimore, Maryland|Baltimore), the majority leader, was co-chairman of the workgroup on fiscal relationships. He said changing maintenance of effort rules was the only likely legislative proposal that would come out. In 2009, the state school board denied requests for waivers of the requirement from Montgomery, Prince George’s and Wicomico counties. Each jurisdiction said it had to cut funding due to reduced local revenues. The school boards had no taxing authority. The county governments provided a large chunk of funding, but they had limited say over how it was spent.[14]
  • Lower tax revenue: Maryland stood to generate less income tax revenue as the number of Maryland taxpayers who reported more than $1 million in personal income fell by nearly a third in 2008. The state might have been losing millionaires who were moving away to avoid paying the tax that was passed in 2008, which was 6.25 percent of revenue beyond $1 million. The tax was a replacement for an unpopular tax on computer services. The tax was set to expire after 2010 and was originally projected to raise $61 million during fiscal year 2011. Ron Wineholt, vice president of government affairs for the Maryland Chamber of Commerce, said he doubted the tax would be as lucrative as projected.[15]

2008-2009 budget crisis

See also: Maryland state budget (2008-2009)

Accounting principles

See also: Maryland government accounting principles

Maryland's Office of Legislative Audits (OLA) publishes its audit reports online. OLA is part of the Maryland General Assembly’s Department of Legislative Services and operates under the authority of the State Government Article, Sections 2-1217 through 2-1227 of the Annotated Code of Maryland; directed by the Legislative Auditor Bruce A. Myers (as of 2009).[16]

OLA reports to the General Assembly’s Joint Audit Committee and is responsible for:

  • Performing fiscal compliance audits of state agencies to evaluate fiscal operations and determine compliance with laws and regulations
  • Conducting performance audits to evaluate whether a state agency or program is operating in an economic, efficient and effective manner
  • Conducting performance audits of the financial management practices of local school systems
  • Operating a fraud hotline for reporting fraud, waste, and abuse of state resources
  • Monitoring the financial reporting practices and financial condition of local governments in Maryland
  • Conducting special reviews and investigations requested by the Joint Audit Committee

The Institute for Truth in Accounting (IFTA) rated Maryland “Timely” in filing the state’s Comprehensive Annual Financial Report (CAFR), the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider Maryland’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[17] Maryland's CAFRs are published online by the Maryland State Comptroller. Maryland's FY 2007 CAFR received the Award for Excellence and "Spirit of Full Disclosure."[18]

Budget transparency

As of 2009, Maryland had partial transparency, thanks to the passage of the Maryland Funding Accountability and Transparency Act. The state has made a searchable database available.[19]

This database for Maryland Funding Accountability and Transparency is sponsored by Maryland's Department of Budget and Management.[20] It contains information on payments to vendors who have received over $25,000 from the state during the fiscal year. This website provided financial information for fiscal year 2008.

Note: the database in some cases reflects payments made to middlemen or agents; for example, the Department of Agriculture "Maryland Ag Land Preservation Foundation" payments were not available in detail. MALPF was a standalone foundation legally, but organizationally was part of the Dept. of Ag.

Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State database Searchability Grants Contracts Line item expenditures Dept./agency budgets Public employee salary Exemption level
MD's Funding Accountability and Transparency
600px-Red x.png
600px-Yes check.png
600px-Red x.png
600px-Red x.png

Public employee salary information

See also: Maryland state government salary

Economic stimulus transparency

  • Maryland would receive approximately $470 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.[21]
  • Maryland would receive an estimated $2,586,766,501 in the first round of federal stimulus funds.[22]

One Maryland project was noted in Senator Coburn's and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. The project gave Palladian Partners Inc. of Silver Spring $363,760 to promote the good things being done with stimulus money by the National Institute of Health.[23]

Error in ARRP

According to, federal stimulus funds would go to 884 congressional districts, though there are only 435.[24][25]

The stimulus package distributed millions of dollars to 15 Maryland congressional districts that did not exist, according to ARRP's website. The state has only 8 districts.[26]

See also

External links

Additional reading


  1. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  2. Letter from General Accounting Division Director Roland Unger to Comptroller Peter Franchot Sept. 1, 2010
  3. The Baltimore Sun "State ends year with more money than expected" Sept. 2, 2010
  4. 4.0 4.1 The Baltimore Sun "The imaginary surplus" Aug. 11, 2010
  5. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  6. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  7. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  8. Maryland Board of Revenue Estimates, "September Revision," September 30, 2009
  9. Maryland General Assembly Web site, accessed October 24, 2009
  10. State of Maryland, "Overview of Maryland budget processes," October 24,2002
  11. Maryland Comptroller Web site, accessed October 24, 2009
  12. Gov. O'Malley Press release, "Statement from Governor O'Malley on Revised Budget Projections," October 17, 2009
  13. 13.00 13.01 13.02 13.03 13.04 13.05 13.06 13.07 13.08 13.09 13.10 13.11 13.12 13.13 13.14 13.15 13.16 13.17 13.18 13.19 US Government Spending, "Maryland State and Local spending," accessed March 17,2009
  14. School boards told to brace for local funding cuts, Maryland Reporter, November 20, 2009
  15. Number of millionaire taxpayers drops in Md. 30 percent, Maryland Reporter, November 23, 2009
  16. Maryland Office of Legislative Audits Web site, accessed October 24, 2009
  17. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  18. Maryland State Comptroller Web site, accessed October 24, 2009
  19. Maryland House Bill 358 (2008)
  20. Maryland Funding Accountability and Transparency database
  21. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  22. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  23. "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
  24. $6.4 Billion Stimulus goes to Phantom Districts,, November 17, 2009
  25. Stimulus Creates Jobs in Non-Existent Congressional Districts,, November 16, 2009
  26. Federal stimulus site gives Maryland 15 new congressional districts, Maryland Reporter, November 17, 2009