Maryland state budget

From Sunshine Review

National Taxpayers Union
Transparency in your state Public employee salary States with spending online Collaborative transparency projects Model transparency legislation #statebooks on Twitter SMTS on Twitter
Action center
Sign up for e-updates Take action

Maryland has 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.^[1] Gov. 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 are 60% from state agencies, 29% from local aid, and 11% from employee salary and benefits.^[2]

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.^[3]

FY 2010 General Fund Spending Percentages after Reductions^[4]

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 anticipate FY 2010 revenues to be $12.314 billion for FY 2010 and $12.734 billion for FY 2011.^[5]

[edit] 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 will convene on January 13, 2010.^[6]

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 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. ^[7]

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 has 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).^[8]

[edit] Budget figures

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

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
• See Maryland state budget (2008-2009) for more details.

[edit] 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. ^[10]

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) 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 does 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 does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[11] 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."^[12]

Peter Franchot was elected Comptroller in November of 2006. The principal duty of this office is to collect taxes. With a budget of $110 million, the agency collects approximately $16 billion a year in state and local tax revenue and provides 12 branch offices throughout the state.^[13]

The Comptroller of Maryland is the:^[14]

• Chief financial officer for Maryland
• Collector of revenue for state programs
• Provider of information technology services for most state agencies
• Regulator of the state’s alcohol, tobacco and motor fuel industries
• Member of many state boards and commissions

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 2000.^[15]
• An independent auditor’s report is published on page 8 of the document.^[16]
• It provides supplements to the budget workup, such as non-major Governmental funds, starting on page 86 of the document.
• The budget is posted using organized and consistent methods of financial reporting.
• Maryland law requires a balanced budget.^[17]
• It includes all costs incurred by the government, including long-term liabilities, starting on page 65 of the document.
• The CAFR compares estimated and actual budgetary numbers, such as on page 86 of the document.
• The Maryland office was timely in submitting the budget.

[edit] The bad

• The CAFR is posted in PDF format, so it’s not searchable online.

Gov. O'Malley commented on Maryland's credit ratings on October 14, 2009 stating, "By returning an era of fiscal responsibility to our State, we have demonstrated that sound financial management is possible even in tough economic times. This highest possible bond rating not only demonstrates Maryland’s fiscal strength as one of only seven states to maintain the highly coveted designation, it also saves taxpayers money."^[18]

[edit] Economic Stimulus Package

Maryland is expected to receive $3.8 billion from the $787 billion dollar economic stimulus. ^[20] All told, the federal stimulus plan would create or save 66,000 jobs in Maryland, based on White House estimates. ^[21]
For more information on how the federal stimulus funds are being used in the state of Maryland, visit the state recovery website.

According to preliminary reports Maryland is expected to receive: ^[20]

• $39 million for public safety
• $54 million towards workforce
• $57 million towards energy
• $123 million towards the environment
• $193 million for housing
• $610 million for transportation
• $1.1 billion for education
• $1.6 billion towards health care

[edit] Lower tax revenue

Maryland will inevitably 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 last year. The national recession that came at the same time as a new tax surcharge for millionaires might be to blame.

The state might be losing millionaires who are moving away to avoid paying the tax that was passed in 2008, which is 6.25 percent of revenue beyond $1 million. The tax was a replacement for an unpopular tax on computer services.

The tax expires after 2010 and was originally projected to raise $61 million during fiscal 2011. Ron Wineholt, vice president of government affairs for the Maryland Chamber of Commerce, said he doubts the tax will be as lucrative as projected.

Del. [[Ballotpedia:Page Elmore|Page Elmore], R-Somerset and Wicomico sits on the House Ways and Means Committee, which oversees taxes. Elmore said he doesn’t think the economy is going to recover enough for the tax to be renewed next year.^[22]

[edit] School funding cut

Maryland's 24 school boards may lose up to 5 percent of their local funding next year, as legislators debate ways to let county governments reduce levels of education spending.

“We’ve told our members to brace for that,” said John Woolums, director of government relations for the Maryland Association of Boards of Education.

“There’s a high probability that the legislature will provide relief for counties,” Woolums said.

Sen. Ed Kasemeyer, D-Howard and Baltimore is the majority leader who is co-chairman of the workgroup on fiscal relationships. He said changing maintenance of effort rules is the only likely legislative proposal that will 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 have no taxing authority. The county governments provide a large chunk of funding, but they have limited say over how it is spent.^[23]

[edit] Budget transparency

Maryland has partial transparency, thanks to the passage of the Maryland Funding Accountability and Transparency Act. The state has made a searchable database available.^[24]

This database for Maryland Funding Accountability and Transparency is sponsored by Maryland's Department of Budget and Management.^[25] It contains information on payments to vendors who have recieved 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 reflects payments made to middlemen or agents, for example, the Department of Agriculture "Maryland Ag Land Preservation Foundation" payments are not available in detail. MALPF is a standalone foundation, legally, but organizationally is part of the Dept. of Ag. So searching the database for "MALPF" or its longer name is not helpful.

You have to type in "Agriculture" and then search; the list that results is 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 are 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.

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

Maryland.gov is the website for the state of Maryland.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is easy to navigate.
• Budget is published.^[26]
• State tax information is provided.^[27]
• Elected officials are listed with contact information.^[28]
• Administrative officials are listed with contact information in a searchable database.^[29]
• State contracts are published.^[30]
• Ethics information is available.^[31]
• Financial audit reports are published.^[32]
• The full Maryland Public Information Act is published.^[33]
• The entire Maryland Open Meetings Act is published here, along with the record of Compliance Board opinions on citizen complaints filed since the early 1990s.
• Provides list of all registered lobbyists.^[34]

[edit] The bad

• Does not provide any information on state-paid lobbying and agency lobbying contracts.
• Contact information/form for making public records requests is provided by some departments, but not all.^[35]
• Open Meetings Act Opinions and indexes are in several different formats (PDF, PDF with links, HTML pages linked to PDFs), making a global search impossible. Office of Attorney General IT personnel will not release a simple archive of all files. However, PDF files are searchable.

[edit] Legislation

• Maryland House Bill 358 (2008), Maryland Funding Accountability and Transparency Act

[edit] 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							$25,000

[edit] Limitations and Suggestions

This database provides useful information, but is limited in scope, and does 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 does list are limited to those made to vendors; it does not provide information on grants, or public employee salaries.^[36] 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.

[edit] Support for creation of the database

Americans for Tax Reform, Americans for Prosperity, and the Maryland Taxpayers Association supported transparency. The National Taxpayers Union urged members of the Maryland House of Delegates to support the passage of House Bill 358.^[37]

[edit] Public employee salary information

Although there is no public employee salary database online, the state posts information about state salaries here.

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[38]

• Maryland will receive an estimated $2,586,766,501 ^[39]

• The economic recovery website to show how legislators and government officials in Maryland are spending Federal funds is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[40][41]

The stimulus package distributed millions of dollars to 15 Maryland Congressional Districts that do not exist, according to ARRP's website. The state has only 8 Districts.^[42]

[edit] See Also

Maryland taxpayer-funded lobbying

[edit] External links

[edit] Additional reading

• Governor Martin O'Malley,"2009 State of the State," January 29,2009

[edit] References

v • d • e State Budgets Cost of state transparency websites • State budget issues, 2009-2010 • Pubic employee salaries • States with spending online • Glossary of state budget terms Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming •

	v • d • e State of Maryland Annapolis (capital)
Transparency	Public Information Act | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of school district websites |
Government	Maryland State Constitution | Executive | House of Representatives | Senate |
Judiciary	Maryland Supreme Court | Court Election (2008) | Circuit Court of Appeals | District Courts | Judicial Nominating Commission | Judicial news | Judicial activist organizations |
Ballot Measures	2008 ballot measures | List of ballot measures | 2008 local ballot measures | List of local ballot measures | Maryland signature requirements | Amending the constitution | History of direct democracy | Campaign finance requirements |