ANNAPOLIS, Md. (AP) — Gov. Martin O’Malley’s budget secretary said Thursday that the state has a general fund surplus of $344 million over previous budget estimates for fiscal year 2011, which ended June 30.
T. Eloise Foster wrote in a letter to O’Malley that the previous budget estimate projected the state would finish the fiscal year with a balance of $646 million. The surplus means the state has a fund balance of $990 million.
Foster attributed the surplus primarily to strong performance in individual income tax collections.
“It is unclear whether this strength will continue moving forward due to current uncertainties in the national economy,” Foster wrote.
Foster also said state agencies have returned about $23.8 million in unspent appropriations to the state’s general fund, which is about $13.5 billion.
About $589.7 million of the fund balance will be used to help balance the fiscal year 2012 budget, Foster said. That leaves about $400 million in uncommitted fund balance.
Foster said about $340 million of the uncommitted fund balance will go to the state’s rainy day fund, $10 million will go to the general fund balance and $50 million will go to transfer tax repayment.
The budget secretary noted that some of the uncommitted balance may be needed in fiscal year 2012 to cover rising Medicaid costs.
Comptroller Peter Franchot said while the surplus provides a measure of relief, the state still faces challenging financial times.
“Given the extent of our ongoing fiscal challenges, as well as those that lie ahead, it is absolutely imperative that we proceed with great caution,” the comptroller said in a statement.
(Copyright 2011 by The Associated Press. All Rights Reserved.)