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The Daily Record's Maryland state government blog

Brinkley says no decisions yet on potential state spending cuts

Secretary of Budget and Management David Brinkley on Jan. 14, 2020. (The Daily Record / Bryan P. Sears)

Maryland Secretary of Budget and Management David Brinkley on Jan. 14, 2020. (The Daily Record / Bryan P. Sears)

Budget cuts necessitated by the COVID-19 pandemic are still pending as state officials look for places to reduce spending in the current year.

“No decisions have been made, and no firm recommendations have been passed on to the governor at this time,” said state Budget Secretary David Brinkley.

Brinkley made his comments during a Board of Public Works meeting after being asked by Treasurer Nancy Kopp about how state spending was being affected by the disease.

Two weeks ago, Gov. Larry Hogan imposed a freeze on state spending and most hiring in anticipation of deep reductions in state revenues.

Brinkley, speaking Wednesday, said no state employees have been laid off or furloughed so far.

The Board of Public Works is expected to make some cuts to the current year’s budget before the end of the fiscal year. The panel can cut up to 25 percent of department budgets without legislative approval.

In 2009, the board under then-Gov. Martin O’Malley cut the budget by about $1 billion as part of a budget correction needed to address the Great Recession.

Comptroller Peter Franchot, also a member of the Board of Public Works, and his staff said the state could come in $2.8 billion lower than previously anticipated revenue before the current fiscal year ends on June 30. There are no current projections for the possible hits to revenue for the upcoming fiscal year.

Maryland has been under a state of emergency since March 5. All but essential businesses have been closed by Hogan for more than a month.

Nearly 300,000 people have filed first-time claims for unemployment in the past month, according to most recent figures released a week ago. The decline in employment will drastically affect personal income tax withholdings.

The state also anticipates severe reductions in state sales tax collections even after accounting for increases expected in online ordering.

Maryland revenues could take an estimated hit of $185 million per month, according to preliminary estimates provided earlier this month by Andrew Schaufele, director of the Bureau of Revenue Estimates at the Office of the Comptroller. Sales tax losses could amount to 59% of all sales tax revenue, or $250 million per month.

Hogan also has indicated he plans on vetoing legislation passed by the General Assembly earlier this year that he says would strain the state’s finances or raise taxes. He has not specified which measures those are, but he has been critical of the cost of the Kirwan education reforms passed by lawmakers.

(This story will be updated.)

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