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Maryland state budget (2010-2011)

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Maryland's $32 billion FY2011 budget was passed by lawmakers on April 8, 2010.[1]

According to Federal Fund Information for States, Maryland was set to receive approximately $470 million from the federal government under HR1586, a $26 billion plan that gave states money for Medicaid and education that the President signed into law on August 10, 2010.[2] Gov. Martin O'Malley said the bill would provide $450 million, with $178 million of those funds going toward education.[3][4]

Going into the fiscal year 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.[5]

2011 State spending & deficit in billions[6]
Total spending Healthcare Education Protection Transport Human resources Other
$32.1 $8.7 $12 $1.8 $3.3 $2.1 $3.9
2011 Local spending & deficit in billions[7]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$31.7 $1 $0.4 $13.1 $1.4 $3.8 $1.1 $15.3

State Budget for FY 2011

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

Maryland ended FY2011 with a $344 million surplus, due in large part to personal income tax payments being higher than lawmakers had anticipated.[8]

On April 8, 2010, state lawmakers reached a compromise deal on a $32 billion budget.[1]

A proposal to had counties start sharing the soaring costs of teacher pension benefits was rejected by the House.[1] The House did, however, go along with the Senate's plan to essentially eliminate a major source of funding for local road construction and maintenance.[1]

Gov. Martin O'Malley proposed a budget that closed a $1.9 billion shortfall in the fiscal year beginning in July, half of which would come from cuts and half through one-time transfers and other budget gimmicks, but left shortfalls projected at near-record levels of $2 billion or more annually through 2015.[1] The budget the House and Senate conference committee agreed cut the governor's projected deficit in 2015 from $2.2 billion to $1.5 billion.[1]

The budget the House and Senate conference committee agreed to on April 8, 2010[1], was approved by the House of Delegates in a 105-34 vote down party lines with only two Republicans supporting it on April 10, 2010.[9] The budget cut the governor's projected deficit in 2015 from $2.2 billion to $1.5 billion.[1] The governor's signature was not required for the bill to become law.[9] The budget relied on federal stimulus money, which some law makers said would lead to tax increases the following year when the federal funds were no longer available.[9]

Under the budget for FY2011, the state remained responsible for nearly $1 billion in teacher pension costs after a Senate proposal to shift the costs to county governments failed. The budget stated that the issue would be examined by a "super blue ribbon" commission that would address state employee retirement, Medicare prescription benefits and teacher pensions.[9]

In addition, the budget directed Gov. O'Malley to save $18 million by eliminating 500 executive branch positions; it allocated $6 million for potential state employee buyouts.[9]

The state spent $10.4 million on stem cell research.[9]

The FY2011 budget leaves $195.5 million in a fund balance, which was available for the state to use for a midyear revenue shortfall.[9]

State Budget for FY 2010

Maryland ended FY2010 with a balance of $344 million, $183.7 million more than projected.[10] Even though those figures represents one of the worst performances by the state in four decades, and a year-over-year decline of 3.7%, the state still outperformed expectations of financial analysts.[11]

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."[12] It added, "To suggest it's a surplus was like saying your checking account had 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."[12]

Gov. Martin O'Malley cut $736 million in spending for FY 2010 to balance the budget in two rounds over the summer; $282 million 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.[13] 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 predict a $1 billion shortfall.[14]

FY 2010 General Fund Spending Percentages after Reductions[15]

K-12 39.2%
Health 22.2%
Rest of State Government 19.3%
Higher Education 10.2%
Public Safety 9.1%

The State of Maryland Board of Revenue Estimates (BRE) released lowered revenue estimates in September of 2009, $682.8 million lower than the March 2009 projections the FY 2010 state budget was based. The latest BRE projections anticipated FY 2010 revenues to be $12.314 billion for FY 2010 and $12.734 billion for FY 2011.[16]

Budget background

The Maryland General Assembly meets each year for 90 days, having convened this year from January 14 and adjourned April 13. The 2010 Session would convene on January 13, 2010.[17]

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 was presented to the Legislature the 7th or 10th day of session in January. Once both the House and the Senate pass the bill, after making any necessary amendments. The Legislature gets the final say on the budget. The Governor lacks any veto authority with respect to the budget as passed.[18]

Created in 1945, the Board of Revenue Estimates was concerned with revenues that would 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).[19]

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.[20]

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

Fiscal Year Expenditures (billions) GDP (billions)
2000 $30.6[21] $180.4[21]
2001 $33.2[21] $192.7[21]
2002 $35.7[21] $204.1[21]
2003 $37.1[21] $213.3[21]
2004 $38.5[21] $228.2[21]
2005 $41.4[21] $243.9[21]
2006 $44.2[21] $257.6[21]
2007 $47.3[21] $268.7[21]
2008 $50.7[21] $280.3[21]
2009 $54.3*[21] $292.4*[21]
  • NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

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 was 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.[22][23]

OLA reports to the General Assembly’s Joint Audit Committee and was 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 was 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) rates 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.[24] Maryland's CAFRs were published online by the Maryland State Comptroller. Maryland's FY 2007 CAFR received the Award for Excellence and "Spirit of Full Disclosure."[25][26]

Budget transparency

Maryland had partial transparency, thanks to the passage of the Maryland Funding Accountability and Transparency Act. The state had made a searchable database available.[27]

This database for Maryland Funding Accountability and Transparency was sponsored by Maryland's Department of Budget and Management.[28] It contains information on payments to vendors who had received over $25,000 from the state during the fiscal year. This Website provides financial information for fiscal year 2008.

Note: the database in some cases reflected 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 Department of Agriculture, so searching the database for "MALPF" or its longer name was not helpful.

You had to type in "Agriculture" and then search; the list that results was not very detailed. Take the top vendor:

2008 LAW OFFICE OF HENRY I LOUIS 21201 $20,504,892.54 or maybe 2008 SAMUEL L HECK ATTORNEY 21620 $8,850,627.04

These attorneys were facilitating multiple land conservation purchases. You can't find out how much was paid to Henry Louis for services. You can't find the individual amounts paid for easements to landowners.

To get useful information requires filing a Maryland Public Information Act request. The agency may or may not cooperate.

See also: Evaluation of Maryland state website

Government tools

The following table was 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

Limitations and Suggestions

This database provided useful information, but was limited in scope, and did not provide line-item expenditures (in part due to its exemption of vendors that received less than $25,000 in any given year). The expenditures it did list were limited to those made to vendors; it did not provide information on grants, or public employee salaries. Such information would prove useful for government officials, legislators, and citizens alike as they work in concert to improve the efficiency and productivity of the state.

Public employee salary information

See also: Maryland state government salary

Although there was no public employee salary database online, the state posted information about state salaries online.[29]

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.[30][4]
  • Maryland would receive an estimated $2,586,766,501 in the first round of federal stimulus funds.[31]
  • Maryland established an economic recovery website to show how legislators and government officials in Maryland were spending Federal funds.[32] The information provided was often not detailed enough for local use, and did not differentiate effectively between "allocated" amounts, contract awards, and actual spending. Furthermore, it was extremely difficult to cross-reference allocation and contract information across multiple Maryland state gov't websites. In some cases, allocations had been listed for months past the point when the money was refused (see Galena, Md wastewater treatment plant loan under MDE) and in others the overall allocation had been counted in full in each county where, for example, a paving project took place.

Bids that come in under the allocation leave money that vanishes back into the state agency administering the stimulus funds. While it was supposed to be used in a similar category for a project elsewhere, there was no guarantee the project was in the same locality. As a result there can be a disconnect between reported allocations and actual spending results.

One Maryland project was noted in Senator Coburn 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 Institutes of Health.[33][34]

See also

External links

Additional reading


  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 The Washington Post "Maryland legislators reach deal on budget over roads, teacher pensions" April 9, 2010
  2. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  3. "Maryland to receive $450 million from jobs bill" Aug. 12, 2010
  4. 4.0 4.1 H.R. 1586
  5. State Budget Solutions “States Hide Trillions in Debt” July 22, 2010
  6. USA Spending, State Guesstimated* Government Spending
  7. USA Spending, State Guesstimated* Government Spending
  8. The Washington Post "With budget surpluses, it’s Md. vs. Va." Sept. 1, 2011
  9. 9.0 9.1 9.2 9.3 9.4 9.5 9.6 Business Gazette "Lawmakers sign off on state budget" April 11, 2010
  10. Letter from General Accounting Division Director Roland Unger to Comptroller Peter Franchot Sept. 1, 2010
  11. The Baltimore Sun "State ends year with more money than expected" Sept. 2, 2010
  12. 12.0 12.1 The Baltimore Sun "The imaginary surplus" Aug. 11, 2010
  13. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  14. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  15. Gov. O'Malley, "Budget Reductions for the Board of Public Works," August 26, 2009
  16. Maryland Board of Revenue Estimates, "September Revision," September 30, 2009
  17. Maryland General Assembly Web site, accessed October 24, 2009
  18. State of Maryland, "Overview of Maryland budget processes," October 24,2002
  19. Maryland Comptroller Web site, accessed October 24, 2009
  20. Gov. O'Malley Press release, "Statement from Governor O'Malley on Revised Budget Projections," October 17, 2009
  21. 21.00 21.01 21.02 21.03 21.04 21.05 21.06 21.07 21.08 21.09 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 US Government Spending, "Maryland State and Local spending," accessed March 17,2009
  22. Maryland Office of Legislative Audits Web site, accessed October 24, 2009
  23. audit reports
  24. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  25. Maryland State Comptroller Web site, accessed October 24, 2009
  26. CAFRs
  27. Maryland House Bill 358 (2008)
  28. Maryland Funding Accountability and Transparency database
  29. Maryland Department of Budget and Management
  30. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals” Aug. 11, 2010
  31. Wall Street Journal, "Stimulus Spending by State," March 12,2009
  32. Maryland Economic Recovery
  33. "Summertime Blues, 100 stimulus projects that give taxpayers the blues" August 2010
  34. Palladian Partners Inc