Maryland lawmakers in 2023 will have before them a committee’s recommendation to send $350 million into reserves of a fund balance account for the upcoming budget cycle.
The Spending Affordability Committee, comprised of members in both chambers of the General Assembly, also on Thursday recommended:
- putting extra money into a construction contingency fund.
- allocating the extra funds to such services as workforce development and behavioral health services.
- using some of the surplus funds to address staffing shortfalls to shore up the 13% vacancy rate.
- allocating additional funds to address transportation-related infrastructure repairs.
The outgoing and incoming administrations worked together prior to Republican Gov. Larry Hogan’s spending plan recommendation unveiled last week. It is Democrat Wes Moore, the governor-elect, who will recommend the budget to the General Assembly for approval; his document is due by Jan. 20, the 10th day of the legislative session.
Moore won election in November and will be sworn in as the Free State’s 63rd governor on Jan. 18. Lawmakers are forbidden to increase the budget total of the governor, and they cannot be vetoed.
According to figures from the Maryland Bureau of Revenue, the state is poised to increase its general fund income from $23.68 million in the fiscal year 2023 budget to $23.73 million in fiscal year 2024.
Since projections indicate the state will not have to use reserve funds in the upcoming fiscal year budget to shore up deficits, bureau representatives indicate cash balances at the end of fiscal year 2023 will total about $3.1 billion, after assuming a 10% contribution into a rainy day fund.
David Romans, a fiscal and policy analyst in the state Department of Legislative Services, said the positive trend is anticipated for at least the next few years.
“Ongoing revenues are more than enough to cover the projected ongoing spending,” Romans said. “The surplus is about $1.4 billion in ’24 and ’25, and then the surplus starts to tail off a little bit. But even by fiscal ’28, you’re still looking at a structural surplus of about $700 million.”
State Sen. Jim Rosaepe, D-Prince George’s County and co-chairman of the committee, said a new administration and a second year of large surplus make the fiscal year 2024 budget pivotal for future success. Romans likes the flexibility afforded when it comes to construction costs and their separation from hitting the bid amounts.
“When you wrap all of these things together,” Rosaepe said, “there’s a strategy to be fiscally prudent for the state.”