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Revision as of 14:41, 28 August 2014


Maryland state budget

Flag of Maryland.png
Budget calendar:  Annual
Fiscal year:  2014
State credit rating:  AAA (as of May 2012)
Current governor:  Martin O'Malley
Financial figures
GF expenses[1]:  $15.119 billion (estimated for FY 2013)
All funds expenses:  $36.974 billion (estimated for FY 2013)
Spending % change:  Green Arrow Up Darker.svg6.01%[2]
% from federal funding:  30.25%
State debt:  $94,211,004,000
Per capita state debt:  $16,010
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Maryland, including:
  • A summary of the budget drafting process
  • Trends in expenditures and revenues
  • Current and past fiscal year budget developments
  • Financial transparency measures

Between fiscal year 2009 and fiscal year 2013, Maryland's total expenditures increased by approximately $5.041 billion, from $31.933 billion in 2009 to $36.974 billion in 2013. This represents a 15.79 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

Budget process

The state operates on an annual budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instructions are sent to state agencies in June of the year preceding the start of the new fiscal year.
  2. State agencies submit their budget requests to the governor in late August.
  3. Agency hearings are held from October through November.
  4. Public hearings are held from January through March.
  5. The governor submits his or her proposed budget to the state legislature on the third Wednesday in January.
  6. The legislature typically adopts a budget in April. A simple majority is required to pass a budget. The fiscal year begins July 1.

In Maryland, the governor may exercise line item veto and item veto of appropriations authority.[6]

The governor is legally required to submit a balanced budget proposal. Likewise, the legislature is legally required to adopt a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Maryland $15,119 $11,811 $8,909 $1,135 $36,974 $6,236.32
Delaware $3,659 $1,783 $3,281 $439 $9,162 $9,896.85
New Jersey $31,618 $12,485 $6,735 $1,247 $52,085 $5,852.68
New York $58,960 $38,574 $32,305 $3,258 $133,097 $6,773.00
Pennsylvania $27,761 $24,144 $15,175 $800 $67,880 $5,314.00
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Maryland can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
Maryland 19.5% 14.5% 3.7% 21.5% 4.3% 9.9% 26.5%
Delaware 24.6% 4.5% 0.3% 15.9% 3.0% 8.9% 42.9%
New Jersey 24.7% 7.8% 0.9% 21.6% 3.2% 9.3% 32.4%
New York 19.8% 7.6% 2.8% 29.4% 2.3% 6.2% 31.8%
Pennsylvania 18.4% 2.8% 1.9% 33.2% 3.5% 9.3% 30.8%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, public assistance spending increased by 1.80 percentage points, or 94.7 percent, as a share of the budget. During the same period, transportation expenditures fell by 1.90 percentage points, or 16.1 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 19.5% 14.5% 3.7% 21.5% 4.3% 9.9% 26.5%
2011 21.0% 14.5% 3.6% 22.2% 4.3% 9.4% 24.9%
2010 21.0% 14.4% 3.1% 20.4% 4.7% 4.6% 31.8%
2009 20.3% 14.7% 2.4% 19.5% 4.4% 10.7% 27.9%
2008 20.9% 15.0% 1.9% 18.9% 4.4% 11.8% 27.3%
Change in % -1.40% -0.50% 1.80% 2.60% -0.10% -1.90% -0.80%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Maryland $7,686 $4,075 $873 $0 $2,324 $14,958 $2,522.93
Delaware $0 $1,084 $206 $0 $2,440 $3,730 $4,029.17
New Jersey $8,460 $12,193 $2,454 $1,118 $6,697 $30,922 $3,474.64
New York $11,232 $40,227 $6,253 $18 $2,461 $60,191 $3,062.98
Pennsylvania $8,968 $11,472 $2,492 $89 $5,801 $28,822 $2,256.34
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Maryland ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $7,686 $4,075 $873 $0 $2,324 $14,958 $2,522.93
2012 $4,039 $7,115 $646 $0 $2,458 $14,258 $2,422.82
2011 $3,656 $6,643 $571 $0 $2,667 $13,537 $2,317.88
2010 $3,523 $6,178 $689 $0 $2,197 $12,587 $2,174.97
2009 $3,620 $6,477 $551 $0 $2,252 $12,900 $2,263.37
Change in % 112.32% -37.09% 58.44% 0.00% 3.20% 15.95% 11.47%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

DocumentIcon.jpg See budget bill: HB 0100

Fiscal year 2014

Maryland state budget -- 2014
Maryland State Legislature
Text:HB 0100
Legislative history
Introduced:January 16, 2013
House:March 15, 2013
Vote (lower house):101-36
Senate:March 20, 2013
Vote (upper house):42-5
Conference:April 5, 2013
Conference vote (upper house):37-8
Conference vote (lower house):103-36
Governor:Martin O'Malley
Signed:April 5, 2013

The fiscal year 2014 budget was enacted into law on April 5, 2013. To access the full text of the budget bill, click here.[14]

Fiscal year 2013

See also: Maryland state budget (2012-2013)

Fiscal year 2012

See also: Maryland state budget (2011-2012)

Fiscal year 2011

See also: Maryland state budget (2010-2011)

Fiscal year 2010

See also: Maryland state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in Maryland ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $14,951 42.9% $9,906 28.4% $9,058 26% $962 2.8% $34,877
2010-2011 $13,281 39.2% $9,452 27.9% $9,951 29.4% $1,156 3.4% $33,840
2009-2010 $13,442 40.5% $8,766 26.4% $9,825 29.6% $1,126 3.4% $33,159
Averages: $13,891.33 41% $9,374.67 28% $9,611.33 28% $1,081.333 3% $33,958.67
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Maryland had a state debt of over $94 billion. Its state debt per capita was $16,010. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[15][16]

Total state debt in Maryland[17]
Type Totals U.S. rank
Total state debt $94,211,004,000 14
Per capita debt $16,010 20
State and other fund expenditures $24,857,000,000 30

Public pensions

See also: Maryland public pensions and Maryland public employee salaries

As of 2012, the state's public pension system had an unfunded liability of approximately $20.6 billion and was 64.37 percent funded. According to the Pew Center on the States "Widening Gap Update," a report on public pensions in all 50 states, Maryland failed to pay its full annual pension contribution from 2005 to 2010. According to the report, most experts agree that a fiscally sustainable system should be at least 80 percent funded.[18]

Maryland’s cost to fund the pensions for some 105,000 current and retired educators soared to nearly $1 billion annually in 2012.[19]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.[20]

The table below lists the Standard and Poor's credit rating for Maryland from 2001 to 2012 (grades from surrounding states are provided for additional context).[20]

S&P credit ratings from 2001 to 2012
Maryland Delaware New Jersey New York Pennsylvania
2012 AAA AAA AA- AA AA
2011 AAA AAA AA- AA AA
2010 AAA AAA AA AA AA
2009 AAA AAA AA AA AA
2008 AAA AAA AA AA AA
2007 AAA AAA AA AA AA
2006 AAA AAA AA AA AA
2005 AAA AAA AA AA AA
2004 AAA AAA AA- AA AA
2003 AAA AAA AA AA AA
2002 AAA AAA AA AA AA
2001 AAA AAA AA+ AA AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[21]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[21]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
Maryland 30.25% $10,031,017,000 33
Delaware 24.46% $1,814,112,000 45
New Jersey 26.25% $13,412,759,000 42
New York 32.78% $48,698,785,000 28
Pennsylvania 30.63% $20,481,434,000 32

Stimulus

Maryland received $5.8 billion in federal funding between February 2009 and June 2013.[22]

According to Federal Fund Information for States, Maryland received approximately $470 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that President Barack Obama signed into law on August 10, 2010.[23] When the funds were first announced, Gov. Martin O'Malley said $178 million of those funds would go toward education.[24]

Budget transparency

Transparency evaluation
Maryland Funding Accountability and Transparency
Searchability Y
600px-Yes check.png
Grants P
Partial.png
Contracts Y
600px-Yes check.png
Line item expenditures N
600px-Red x.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries N
600px-Red x.png
Last evaluated in 2012.
See also: Evaluation of Maryland state website and Constitutional provisions regarding reading of bills

As a result of the passage of the Maryland Funding Accountability and Transparency Act, the state has made a searchable spending database available.[25]

This database for Maryland Funding Accountability and Transparency is sponsored by Maryland's Department of Budget and Management.[26] It contains information on payments to vendors who have received over $25,000 from the state during the fiscal year.

The table to the right is helpful in evaluating the level of transparency provided by a state spending and transparency database.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for Maryland, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[27][28]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. Maryland tied for eighth in the nation with 11 other states, earning six out of eight possible points.[28]

Maryland - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting
{{{1}}}
Annual cycle Y
600px-Yes check.png
Binding revenue forecast N
600px-Red x.png
Legislative revenue forecast
{{{1}}}
Nonpartisan staff Y
600px-Yes check.png
Constitution or statutory tax/spend limitations Y
600px-Yes check.png
TOTAL 6

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[28]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[29] According to the report, Maryland received a grade of B- and a numerical score of 82.5, indicating that Maryland was an "advancing" state in terms of transparency regarding state spending.[29]

Accounting principles

See also: Maryland government accounting principles

Maryland's Office of Legislative Audits (OLA) publishes its audit reports online.[30] 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.[31]

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

Contact information

Maryland Department of Budget and Management
45 Calvert Street
Annapolis, Maryland 21401
Telephone: 410-260-7041

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. Maryland General Assembly, "HB 0100 (CH 0423)," accessed April 22, 2014
  15. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  16. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  17. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  18. Pew Center on the States, "Widening Gap Update," accessed November 27, 2013
  19. The Washington Post, "Governor O’Malley’s budget raises taxes on Maryland’s high-earners," January 17, 2012
  20. 20.0 20.1 Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  21. 21.0 21.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  22. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  23. Federal Fund Information for States “ARRA FMAP Extension & Education Jobs Fund Totals,” August 11, 2010
  24. DelmarvaNow.com, "Maryland to receive $450 million from jobs bill," August 12, 2010
  25. Maryland State Legislature, "Maryland House Bill 358 (2008)," accessed April 22, 2014
  26. Maryland Funding Accountability and Transparency, "Home page," accessed April 22, 2014
  27. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  28. 28.0 28.1 28.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  29. 29.0 29.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  30. Maryland Office of Legislative Audits, "Audit Reports," accessed August 20, 2013
  31. Maryland Office of Legislative Audits, "Home page," accessed October 24, 2009