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Md. Panel Backs Halving Structural Deficit

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ANNAPOLIS, Md. (AP) — A panel of Maryland lawmakers voted Thursday night to recommend that Gov. Martin O’Malley and the General Assembly reduce the state’s structural deficit by 50 percent in the next legislative session, but left the governor with the flexibility to close some of the gap with tax increases instead of budget cuts only.

The Spending Affordability Committee’s recommendations are not binding on the governor, who submits the state budget in January.

The vote was 14-3, with all Democrats and one of four Republicans present voting for it.

Although Maryland is required by law to have a balanced budget each year, the state’s projected spending outpaces estimated revenue by roughly $1 billion, creating an ongoing budget gap known as a structural deficit that shows up each year unless lawmakers find a way to close it.

Last year, the panel recommended reducing the state’s ongoing imbalance by 33 percent, and the General Assembly ended up tackling nearly half of what was then a larger budget hole.

The panel decided this year not to specify that the deficit reduction be achieved through budget cuts alone, leaving the governor with flexibility to make up some of the deficit by increasing taxes or shifting responsibility for paying some bills to other sources.

Delegate Anthony O’Donnell, R-Calvert, tried to change this year’s recommendations to require the deficit reduction to be done strictly by budget cuts, but the panel rejected the idea.

“I think we violated the spirit of the spending affordability limitations,” O’Donnell said. “There are no limitations anymore.”

Senate President Thomas V. Mike Miller, D-Calvert, said one of the biggest budget issues will revolve around spurring job growth.

“Hopefully, we can get some revenues to put some money into transportation and job creation on roads and bridges and infrastructure,” Miller said.

Miller said he hoped lawmakers will be able to accelerate a five-year borrowing plan into a couple of years to help create jobs through the state’s capital budget.

“We’re looking at various ways to improve the job climate in the state of Maryland,” Miller said.

A state commission has recommended the state increase its gas tax by 15 cents a gallon over three years, with a 5-cent increase each year, as a key component of raising more than $800 million in new revenue for transportation projects.

Miller said he’d like to see about $500 million in new revenue, but he declined to specify how it would be raised.

“I’m going to leave it up to the General Assembly and the governor as to how he wants to propose getting there,” Miller said.

(Copyright 2011 by The Associated Press. All Rights Reserved.)

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