Docstoc

HOUSE REPUBLICAN CAUCUS Fiscal Vision for Maryland

Document Sample
HOUSE REPUBLICAN CAUCUS Fiscal Vision for Maryland Powered By Docstoc
					HOUSE REPUBLICAN CAUCUS
    Fiscal Vision for Maryland




         March 1, 2011

                                 1
HOUSE REPUBLICAN CAUCUS
   Fiscal 2012 Budget



Review of Governor’s
    Budget Plan



                          2
          HOUSE REPUBLICAN CAUCUS
Analysis of Governor’s FY 2012 Budget Actions (a)
        Estimated Baseline Cash Deficit (Dec.)                                             $(1,582)
        Cuts in Baseline Spending                                                             $670
        Special Fund Raids (b)                                                                  325
        Tax & Fee Increases                                                                     245
        Wishful Thinking (Lower Deficiencies)                                                   243
        Federal Stimulus                                                                        124
        Other                                                                                    70
            Total Actions                                                                   $1,677
        Fund Balance Projected for FY 2012                                                      $95
(a) Recategorized    from official categories.
(b) Includes   raid on TTF and $191 million in “bonding” to replace diverted Special Funds (POS and BRF).   3
      HOUSE REPUBLICAN CAUCUS
       Governor’s Budget Actions
Cuts from                         Diversions and
 Baseline                            Transfers
  $670                                 $325
(40%)                                (19%)



   Other
    $70
   (4%)                           Tax & Fee
                                  Increases
             Federal
                                    $245
            Stimulus   Wishful
              $124     Thinking   (15%)
                         $243
            (7%)
                       (14%)                       4
              HOUSE REPUBLICAN CAUCUS
        Total Operating Budget – Governor’s Plan

$36.0       The Governor has proposed a
             $1 billion spending increase                        $34.1*
$34.0       in the Total Operating Budget.              $33.1
                                               $32.0
$32.0                            $30.9
                        $29.6
$30.0        $28.8

$28.0



$26.0



$24.0
           2007        2008     2009         2010      2011     2012


*Governor’s Proposal                                                      5
                  HOUSE REPUBLICAN CAUCUS
              Governor’s Budget Spending Summary
                                                                            Proposed
                                                                               by             Change 2012 vs.
                                   Actual                    Working        Governor               2011

                     2007       2008      2009     2010         2011            2012          Dollars         Percent


General Fund          $14.2 $14.5 $14.4 $13.4                    $13.2            $14.6               $1.4     10.6%


State Funds           $22.4 $23.0 $23.1 $22.2                    $22.8            $24.8               $2.0      8.6%


Total Operating       $28.8 $29.6 $30.9 $32.0                    $33.1            $34.1             $1.0(a)     3.1%
 Budget (All Funds)


 (a) Major
         increases include Medicaid (up $828 million or 13.6%), Health (up $115 million or 4.3%),
 and Higher Ed (up $96 million or 2.0%).
                                                                                                                 6
              HOUSE REPUBLICAN CAUCUS
          Total Operating Budget: 1979-Present
                                  ($ in billions)

 $35.0

            The Governor’s Budget Plan
 $30.0
           continues a long-term pattern
 $25.0      of unsustainable increases in
                     spending.
 $20.0


 $15.0


 $10.0


  $5.0


  $0.0
         1986




         1990
         1979
         1980
         1981
         1982
         1983
         1984
         1985

         1987
         1988
         1989

         1991
         1992
         1993
         1994
         1995
         1996
         1997
         1998
         1999
         2000
         2001
         2002
         2003
         2004
         2005
         2006
         2007
         2008
         2009
         2010
         2011
         2012
                                                    7
*Governor’s Proposal
        HOUSE REPUBLICAN CAUCUS
GF Cash Balance Deficits Under Governor’s Plan
                        ($ in millions)

$1,000
          $680                            The Governor’s Plan does not
                                          solve the deficit and will lead
  $500                                       to future tax increases.
                 $95
    $0


 -$500


-$1,000
                               -$1,100         -$1,148       -$1,175
-$1,500
          2011   2012              2013           2014          2015        8
HOUSE REPUBLICAN CAUCUS
   Fiscal 2012 Budget



       GOP
    Budget Plan



                          9
         HOUSE REPUBLICAN CAUCUS
            Vision for Maryland

We envision…
• A smaller, less-intrusive State government.

• A State government that operates consistently
  within its means.

• A reduced tax burden on Maryland citizens.


                                                  10
                HOUSE REPUBLICAN CAUCUS
               Missed Opportunities 2003-2010
  Session                              Proposal                      Cumulative
                                                                   Impact to Today
2003        Enact slots legislation.                               $4.5-5.0 billion

2004        Retain 5% “trigger” provision for education.           $4.5 billion

2007        Constrain budget growth to 1.5% (up $200 million)      $2.8 billion
            and cap GF spending to $13.8 billion in FY ‘08.

2007 (special) Adopt slow-growth budget in FY 2009 (3.5% growth)   $1.8 billion
               and free-market slots plan.

2008        Reduce growth in GF spending to 2.6% for FY ‘09.       $1.2 billion

2009        Reduce total budget growth to 0% for FY ‘10.           $1.2 billion

2010        Reduce GF spending by 2.7% for FY ‘11.                 $725 million
                                                                              11
          HOUSE REPUBLICAN CAUCUS
              GOP Fiscal Goals

(i) Achieve a positive General Fund balance in
    each of the next five years without raising
    taxes.
(ii) Achieve a structurally balanced General
     Fund budget by 2013.
(iii) Reduce the tax burden on Maryland citizens:
     Reverse the 2007 sales tax increase.
     Reverse the 2007 corporate tax increase.

                                                  12
          HOUSE REPUBLICAN CAUCUS
          GOP Fiscal Goals (Continued)

(iv) Reject the Governor’s proposal to raid the
     Bay Restoration Fund and Project Open
     Space and to replace the funds with new
     debt.
(v) Replenish the Transportation Trust Fund
    without an increase in the gas tax.
(vi) Maintain the Rainy Day Fund and strong
     general fund balances.
                                                  13
         HOUSE REPUBLICAN CAUCUS
           Action Steps for FY 2012

• Implement an additional $621 million of
  spending reductions in FY ‘12.
  – $518 million decrease (3.5%) from FY 2011.

• Cancel proposed raids on Bay Restoration
  Fund and Project Open Space.
• Cancel raid on TTF.


                                                 14
         HOUSE REPUBLICAN CAUCUS
  Action Steps in Future Years (FY 2013-2016)
• Constrain growth in the General Fund:
  –   2013: 2%
  –   2014: 2%
  –   2015: 2%
  –   2016: 4%

• Restore $500 million to the TTF (FY 2012-2016)
• Repeal the Special Session tax increases:
  – Reduce sales tax rate from 6% currently to 5.5% in FY 2014 and
    5% in FY 2015.
  – Reduce corporate income tax from 8.25% to 7.0% beginning in
    FY 2014.
                                                                     15
           HOUSE REPUBLICAN CAUCUS
    General Fund Program Spending Comparison
                                                ($ in Billions)
             Governor’s Proposal                                          GOP House Proposal
        2011-2015 Increase: $2.2 Billion                            2011-2015 Increase: $354 Million
$18.0                                               $18.0

                                        $17.0
$17.0                                               $17.0
                                $16.3
$16.0                                               $16.0
                        $15.6
                                                                                                  $15.1
                $14.9                                                                     $14.8
$15.0   $14.8                                       $15.0         $14.8
                                                                                  $14.5
                                                                          $14.2

$14.0                                               $14.0


$13.0                                               $13.0
         2011 2012 2013 2014 2015                                   2011 2012 2013 2014 2015
                                                                                          16
                          HOUSE REPUBLICAN CAUCUS
       General Fund Budget Surplus/(Deficit) Comparison
                                     (Cash-Basis Standard)

 ($ in Millions)
                    Governor’s Proposal*                      GOP House Proposal*
$1,000                                            $1,000
                                                             $680 $609
                   $680                                                $527 $434
                                                    $500                         $375
  $500
                                                       $0
                          $95
      $0                                           ($500)

 ($500)                                          ($1,000)

                                                 ($1,500)
($1,000)
                                                 ($2,000)
                             ($1,148)
                       ($1,100)    ($1,175)
($1,500)                                         ($2,500)
              2011 2012 2013 2014 2015                       2011 2012 2013 2014 2015
               * DLS estimates                               *DLS estimates adjusted for GOP actions 17
                       HOUSE REPUBLICAN CAUCUS
   General Fund Budget Surplus/(Deficit) Comparison
                                   (“Structural Balance” Standard)
  ($ in Millions)
                    Governor’s Proposal                              GOP House Proposal
                                                                           $25 $1 $30
     $0                                                  $0

 ($400)                                              ($400)
                                                                     ($426)
 ($800)                                              ($800)

($1,200)                                           ($1,200)
                     ($1,170)    ($1,155)
                          ($1,188)     ($1,185)
($1,600)                                           ($1,600)
            ($1,562)                                           ($1,562)

($2,000)                                           ($2,000)

($2,400)                                           ($2,400)
              2011 2012 2013 2014 2015                          2011 2012 2013 2014 2015
                                                                                      18
              HOUSE REPUBLICAN CAUCUS
                      Summary
• The Governor’s Plan:
   – Relies too heavily on transfers, taxes & fees and wishful
     thinking
   – Continues a pattern of unsustainable growth in spending
   – Does not eliminate the deficit
• The GOP Plan:
   –   Represents new vision for Maryland
   –   Reduces unsustainable levels of spending
   –   Balances the State budget structurally
   –   Reduces the tax burden on Maryland citizens
   –   Cancels raids on the TTF, BRF and POS
   –   Increases funding to the TTF without a gas tax hike
                                                                 19

				
DOCUMENT INFO