The General Assembly’s own Office of Policy Analysis has now pegged the 2011 state budget deficit at a crushing $1.6 BILLION. Senate President-for-Life Mike “V.” Miller says addressing the budget black hole “is going to be very, very, difficult.” Of course the “non-partisan” OPA was considerate enough to wait until AFTER November 2 to release the bad news, presumably with the humanitarian intention of avoiding fear-mongering among the peasants. In Naptown, “V” stands for Venal.
The OPA “Spending Affordability Briefing” is a shocking data-dump for the numerate. But a read though the charts prepared by OPA Director Warren Deschenaux show the fiscal outlook is much worse than the MSM have reported.
I’ll try to share some of the most appalling “lowlights” here on the mighty Signal.
But you can also download the charts and tables and see for yourself at:
http://mlis.state.md.us/other/spending_affordability/briefing_111010.pdf .
Lowlight: The Dixiecrats claim that the last thing to be cut will be state aid for public education. But the biggest percentage increase in public education support between 2011 and 2012 will be subsidies for the schools with the highest numbers of illegal aliens, where state subsides for “limited English proficiency” payments will go up a hefty 7.7%. The relative increase from 2010 is even higher, 9.5%, but OPC chief Warren Deschenaux conveniently omitted that figure from the briefing, which you have to calculate for yourself. See Briefing page 14.
By contrast, funding for community colleges will rise a measley 1.9%, and supplemental state education grants, designed to improve programs for the poorest American public school students, will drop by 9.2% from 2010 to 2012. Again, the budget analyst only provides the percent for the 2011-12 projected change, to make it look like there is no real drop at all.
Lowlight: The worst fiscal situation in Maryland’s history since the end of federal occupation after the Civil War is barely reflected in the Dixiecrats’ suicidal entitlements for votes agenda. Projected general fund spending on direct welfare payments is projected to metastasize 113.3 % between FY 2011 and 2012, while state medical assistance programs, which include massive subsidies for uncompensated medical care for illegal aliens, will surge 66% next fiscal year, an increase of $1.15 BILLION DOLLARS in just 12 months! See Briefing page 39.
Lowlight: While the “magic” press conference budget deficit is pegged at $1.6 BILLION, the structural deficit – that’s the “real” 2012 budget deficit of ongoing revenues less operating costs—is a staggering $2.1 BILLION. See Briefing page 16.
Lowlight: The General Assembly spent like drunken sailors and stole grandma’s savings to fool the public with the 2011 budget. Buried on the last page of the briefing is a chart innocently labeled the “Fund Transfers and Multiyear General Obligations Bond Repayment Plan.” An inquiring taxpayer will see that the Dixiecrats “transferred” $444 MILLION for 18 key special trust funds (a total of 57 funds in all were raided) to pay the bills this year.
The “repayment plan,” to be spread over the coming four years, is of course a fantasy. Briefing page 51. Even more shocking is the $350 MILLION taken in 2011 from the Local Income Tax Reserve— income taxes collected by the state for county governments— and used instead to paper over the shortfall in funding for the soon-to-be bankrupt state teachers pension funds. Briefing page 11.
Lowlight: In 2012, the state will somehow have to come up with $1.21 BILLION in new state taxes to replace one-time federal stimulus funds used to paper over the 2011 deficit. Briefing page 11.
Lowlight: We're starting to pay out-of pocket for Obamacare madness in 2012. Since BS&N (Barak, Steney and Nancy) slashed reimbursement for over-the-counter medications from the federal health savings programs starting on January 1, 2011, the state will have to pay $5.1 million just to fund the difference for state Medicaid recipients. Briefing page 8.
Lowlight: The state is planning on a nearly 450% increase in video lottery terminal revenues between now and 2015 just to keep the “magic” deficit figure below its unsustainable 2011 level. This “stupid poor people’s tax” scheme is a fiscal fantasy and a social abomination. Briefing page 22.
Lowlight: Maryland has reached its maximum sustainable level for general obligation bond borrowing, which is calculated as a ceiling of 8% on state general revenues used to pay GO bond interest payments. Briefing page 26.
The outlook for the Transportation Trust Fund is even worse. They apparently have exceeded their sustainable borrowing limits by projecting unreal revenue levels over the next five years from vehicle titling and fuel taxes. BOTTOM LINE: Even if O’Malley imposes draconian taxes, Maryland’s capital spending programs, particularly for roads and public transportation, are going to take a massive hit. Crumbling infrastructure will then takes its inevitable toll on state economic activity and the tax base it can generate. It’s called the race to the bottom. Briefing page 23-24.
Comments