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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.
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.
The table shows that GO bond replacement represented 35 percent of all GO bond authorizations in FY 2011.
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.
Tags: bond debt, budget, Martin O'Malley, spending, state debt
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