May 17, 2016 - Joint Legislative Affairs and Economic Development Member Exchange Meeting Recap
Guest Speaker: John Rohrer, Coordinator, Fiscal and Policy Analysis, Department of Legislative Services, Maryland General Assembly
Topic: Maryland Fiscal Outlook
The vice-chair of the Legislative Affairs Committee, Leslie Ford Weber, welcomed MCCC members and introduced the guest speaker, John Rohrer, Coordinator, Fiscal and Policy Analysis, Department of Legislative Services, Maryland General Assembly to discuss Maryland’s fiscal outlook. Mr. Rohrer has been a guest speaker before, most recently to provide insight in the depth of the recession. His presentation today provided insight into the connection between the budget and legislation i.e.: budget summary, legislative initiatives, budget outlook and tax proposals from 2016 that may reappear in 2017.
Overall, Maryland has been a fiscally responsible state. In FY 16, Maryland has a structurally balanced budget which made the FY 17 budget process run more smoothly than in the past. Nevertheless, there were a number of legislative actions that mandated additional spending and had some modest impact on revenues. Future forecasts are always conservative and show spending outpacing revenue by about $150 million/year. When evaluating tax reduction proposals, it is important to know this to understand the impact on the structural deficit as it shows the impact in the out years.
Other drivers of the budget gap include debt service, Medicaid, and mandated spending (mostly on education). In 2016, there were a number of tax reform proposals from both the Augustine Commission and the Governor. Very few passed, mostly due to different approaches in the Senate and the House. There are also ‘perennial’ tax initiatives that are discussed every year but do not always pass.
DLS is waiting for information to come in on the 2015 tax collections in order to know how close to estimates we are. This will help create the forecasts for next year.
A copy of the presentation is available upon request.
For future Member Exchange Meetings, please visit the MCCC calendar.