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Maryland maxing out public credit card

Since 2010 Governor Martin O’Malley and the General Assembly have put $1.2 billion on the public credit card in order to replace funds, raided from special dedicated accounts, to cover general fund spending increases.

According to a table from the non-partisan Department of Legislative Services :

A major component of the operating budget in the most recent budgets includes the use of general obligation (GO) bond funds as replacement for special fund revenues transferred from various capital accounts to the general fund. In addition GO bonds have been used to replace capital pay-as-you-go (PAYGO) funds resulting in the shift of certain PAYGO funded grant and loan programs to the bond program.

Despite his claims of billions in budget cuts, total state spending under O’Malley has increased over 25 percent.  Maryland’s total debt according to State Budget Solutions is $82 billion.

The table shows that GO bond replacement represented 35 percent of all GO bond authorizations in FY 2011.

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Maryland’s debt service is paid for out of property tax revenue.  Those revenues have not kept up with the pace of the state’s debt.  O’Malley did set aside $108 million to help cover property tax shortfall.  However, a property tax hike—as much as 56 percent–may be needed to meet state debt service obligations.

 

Mark Newgent

Mark Newgent is the editor of Watchdog Wire - Maryland, and a contributing editor to Red Maryland, the premiere blog of conservative politics in the Free State, voted one of the best state political blogs by the Washington Post two years in a row. His writing has appeared in the Baltimore Sun, Washington Examiner, National Review Online, and more. Contact: Maryland@WatchdogWire.com, Twitter: @MarkNewgent

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