Mission failure: O’Malley budget won’t erase structural deficit

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A structural budget deficit that has plagued the state for more than a decade will continue to vex the next governor, according to a budget expected to be released later today by Gov. Martin J. O’Malley.

The Baltimore Sun reports this morning that O’Malley will present a $39 million billion budget that will close a $400 million gap in the budget without raising taxes but leaves the next governor and General Assembly holding the bag next year to the tune of about $188 million in structural deficit.

O’Malley’s soon-to-be-released spending plan, which is expected to come in around $39 billion for the next fiscal 2015, would be about $2 billion more than the budget approved for the current year.

The governor has previously said that he had hoped to bring the budget back into structural balance and erase the constant pressure of finding money to cover the costs of programs that outpaced state revenue.

Democrats and Republicans see the genesis of the problem differently.

Democrats blame income tax cuts made  during the term of then Gov. Parris Glendening.  Republicans, on the other hand, say that passage of a $1.3 billion education spending plan known as Thornton, also under Glendening, caused the problem.

At one point, the state’s structural budget deficit was as much as $1.7 billion.

O’Malley, in an interview with the Baltimore Sun,  he “made a lot of tough decisions to reduce the overall size of government” over his eight years in office.

There were also a lot of tax and fee increases—about 40 or so of them according to Republicans—including the gas tax and income tax increases on the so-called “hundred-thousand-aires.”

Last fall, state budget experts told the General Assembly that revenues in the current budget could fall short by nearly $90 million. The structural deficit for fiscal 2015 was projected at over $500 million

A few months later, the state Board of Revenue estimates said state income from taxes would be more than $100 million less than expected.

Also included in the plan is a 3 percent increase in state college tuition fees, according to WBAL radio.