Report Highlights Difficulty Of Balancing Maryland’s Budget
Balancing Maryland’s budget by cutting services would be nearly impossible to achieve without serious cutbacks in essential services such as education, health care, and public safety, as well as other public services.
A new report by the Maryland Budget and Tax Policy Institute explains Maryland’s revenue shortfall and discusses the services that would be at risk if policymakers opt to balance Maryland’s budget by cutting services.
Maryland’s projected general fund revenue shortfall of $1.3 billion for next fiscal year is equal to $1 out of $9 of projected spending. As a result, balancing the budget by cutting spending could seriously harm the level and quality of a wide range of public services in Maryland.
The report documents the current status of general fund spending in Maryland — where the spending goes and what it buys — and discusses the consequences of service cuts in the major program areas. Among the report’s highlights is that nearly 80 percent of general fund spending is for education, health, and public safety, or is required by Maryland law.
The remaining 20 percent of spending supports services such as environmental protections, administration of courts, child care and other family supports, and the operation and maintenance of state parks and forests.
Budget savings in any of these program areas would be difficult to achieve without risking the quality of life in Maryland.
“Forty percent of general fund spending supports education. Balancing the budget by cutting services likely means slowing progress to improve elementary and secondary education throughout the state,” said Steve Hill, author of the report. Hill noted that just months ago, Maryland legislators voted to phase-in a $1.3 billion per year increase in spending on elementary and secondary education.
More than 25 percent of spending supports health services such as Medicaid and mental health, developmental disabilities, community health and substance abuse services. “Health services have been underfunded for so long in Maryland that further reductions in services would be devastating,” said Jan Schmidt, Public Relations Director for Advocates for Children and Youth and a representative of the Alliance to Invest in Maryland, a newly-forming coalition of nonprofit organizations and interested citizens who are seeking to preserve adequate funding for a broad range of state services.
The report notes that Medicaid eligibility and payment levels are already well-below national averages, and that fifteen community mental health clinics have closed in the past two years due to inadequate state funding.
The Medicaid program provides access to health insurance for 480,000 Marylanders, all of whom are either low- and moderate-income children or very low-income parents with children, the aged, and people with severe disabilities. The report states that 70 percent of Medicaid costs are for services provided to the 30 percent of recipients who are aged or who have disabilities.
“Cutting Medicaid services could mean reducing services for those who are the most vulnerable or have the greatest health needs,” said Schmidt. “It would be shameful for one of the richest states in the U.S. to balance the budget by cutting health services to children or to very low-income elderly and people with severe disabilities.”
If policymakers protect education, health and public safety from budget cuts, the report indicates that there may not be enough services left to cut to balance the budget.
“It is easy to talk about balancing the budget by cutting spending, but once one takes a close look at the budget and where the money goes now, it is hard to see where services can be cut without seriously harming the quality of life here,” Hill continued. “Marylanders need to know what their tax dollars buy, and what the consequences would be of balancing the budget by cutting services.”
“Unfortunately for our policymakers, there is no line item in the budget for ‘fraud, waste, abuse and inefficiency.’ There is no place to cut $1 out of every $9 in spending without cutting into important services on which Marylanders rely, whether it is a visible service such as public safety and education, or a less-visible activity such as environmental protections, consumer protections and the administration of courts,” said Hill.