HOUSE REPUBLICAN CAUCUS
Transcript of HOUSE REPUBLICAN CAUCUS
HOUSE REPUBLICAN CAUCUSFiscal Vision for Maryland
March 1, 2011
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HOUSE REPUBLICAN CAUCUSFiscal 2012 Budget
Review of Governor’s
Budget Plan
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HOUSE REPUBLICAN CAUCUSAnalysis of Governor’s FY 2012 Budget Actions (a)
Estimated Baseline Cash Deficit (Dec.) $(1,582)
Cuts in Baseline Spending $670
Special Fund Raids (b) 325
Tax & Fee Increases 245
Wishful Thinking (Lower Deficiencies) 243
Federal Stimulus 124
Other 70
Total Actions $1,677
Fund Balance Projected for FY 2012 $95
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(a) Recategorized from official categories. (b) Includes raid on TTF and $191 million in “bonding” to replace diverted Special Funds (POS and BRF).
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HOUSE REPUBLICAN CAUCUSGovernor’s Budget Actions
Cuts from Baseline
$670
(40%)
Diversions and Transfers
$325
(19%)
Tax & Fee Increases
$245
(15%)Wishful Thinking
$243
Federal Stimulus
$124
(7%)
Other$70
(4%)
(14%)
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HOUSE REPUBLICAN CAUCUSTotal Operating Budget – Governor’s Plan
$24.0
$26.0
$28.0
$30.0
$32.0
$34.0
$36.0
2007 2008 2009 2010 2011 2012
$28.8$29.6
$30.9
$32.0
$33.1
$34.1*
*Governor’s Proposal
The Governor has proposed a $1 billion spending increase
in the Total Operating Budget.
Actual Working
Proposed
by
Governor
Change 2012 vs.
2011
2007 2008 2009 2010 2011 2012 Dollars Percent
General Fund $14.2 $14.5 $14.4 $13.4 $13.2 $14.6 $1.4 10.6%
State Funds $22.4 $23.0 $23.1 $22.2 $22.8 $24.8 $2.0 8.6%
Total Operating $28.8 $29.6 $30.9 $32.0 $33.1 $34.1 $1.0(a) 3.1%
Budget (All Funds)
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HOUSE REPUBLICAN CAUCUSGovernor’s Budget Spending Summary
(a) Major increases include Medicaid (up $828 million or 13.6%), Health (up $115 million or 4.3%), and Higher Ed (up $96 million or 2.0%).
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HOUSE REPUBLICAN CAUCUSTotal Operating Budget: 1979-Present
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
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($ in billions)
*Governor’s Proposal
The Governor’s Budget Plan continues a long-term pattern of unsustainable increases in
spending.
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HOUSE REPUBLICAN CAUCUSGF Cash Balance Deficits Under Governor’s Plan
$680
$95
-$1,100 -$1,148 -$1,175-$1,500
-$1,000
-$500
$0
$500
$1,000
The Governor’s Plan does not solve the deficit and will lead
to future tax increases.
($ in millions)
2011 2012 2013 2014 2015
HOUSE REPUBLICAN CAUCUSFiscal 2012 Budget
GOP
Budget Plan
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HOUSE REPUBLICAN CAUCUSVision for Maryland
We envision…
• A smaller, less-intrusive State government.
• A State government that operates consistently within its means.
• A reduced tax burden on Maryland citizens.
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HOUSE REPUBLICAN CAUCUSMissed Opportunities 2003-2010
Session Proposal CumulativeImpact to Today
2003 Enact slots legislation. $4.5-5.0 billion
2004 Retain 5% “trigger” provision for education. $4.5 billion
2007 Constrain budget growth to 1.5% (up $200 million) and cap GF spending to $13.8 billion in FY ‘08.
$2.8 billion
2007 (special) Adopt slow-growth budget in FY 2009 (3.5% growth) and free-market slots plan.
$1.8 billion
2008 Reduce growth in GF spending to 2.6% for FY ‘09. $1.2 billion
2009 Reduce total budget growth to 0% for FY ‘10. $1.2 billion
2010 Reduce GF spending by 2.7% for FY ‘11. $725 million
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HOUSE REPUBLICAN CAUCUSGOP Fiscal Goals
(i) Achieve a positive General Fund balance in each of the next five years without raising taxes.
(ii) Achieve a structurally balanced General Fund budget by 2013.
(iii) Reduce the tax burden on Maryland citizens: Reverse the 2007 sales tax increase.
Reverse the 2007 corporate tax increase.
(iv) Reject the Governor’s proposal to raid the Bay Restoration Fund and Project Open Space and to replace the funds with new debt.
(v) Replenish the Transportation Trust Fund without an increase in the gas tax.
(vi) Maintain the Rainy Day Fund and strong general fund balances.
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HOUSE REPUBLICAN CAUCUSGOP Fiscal Goals (Continued)
• Implement an additional $621 million of spending reductions in FY ‘12.
– $518 million decrease (3.5%) from FY 2011.
• Cancel proposed raids on Bay Restoration Fund and Project Open Space.
• Cancel raid on TTF.
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HOUSE REPUBLICAN CAUCUSAction Steps for FY 2012
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HOUSE REPUBLICAN CAUCUSAction Steps in Future Years (FY 2013-2016)
• Constrain growth in the General Fund:– 2013: 2%
– 2014: 2%
– 2015: 2%
– 2016: 4%
• Restore $500 million to the TTF (FY 2012-2016)
• Repeal the Special Session tax increases:– Reduce sales tax rate from 6% currently to 5.5% in FY 2014 and
5% in FY 2015.
– Reduce corporate income tax from 8.25% to 7.0% beginning in FY 2014.
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$14.8 $14.9
$15.6
$16.3
$17.0
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
Governor’s Proposal2011-2015 Increase: $2.2 Billion
2011 2012 2013 2014 2015
HOUSE REPUBLICAN CAUCUSGeneral Fund Program Spending Comparison
$14.8
$14.2 $14.5
$14.8 $15.1
$13.0
$14.0
$15.0
$16.0
$17.0
$18.0
GOP House Proposal2011-2015 Increase: $354 Million
2011 2012 2013 2014 2015
($ in Billions)
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$680
$95
($1,100)($1,148)
($1,175)($1,500)
($1,000)
($500)
$0
$500
$1,000
Governor’s Proposal*
* DLS estimates
$680 $609 $527 $434 $375
($2,500)
($2,000)
($1,500)
($1,000)
($500)
$0
$500
$1,000
GOP House Proposal*
*DLS estimates adjusted for GOP actions
2011 2012 2013 2014 2015 2011 2012 2013 2014 2015
HOUSE REPUBLICAN CAUCUSGeneral Fund Budget Surplus/(Deficit) Comparison
($ in Millions)
(Cash-Basis Standard)
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HOUSE REPUBLICAN CAUCUSGeneral Fund Budget Surplus/(Deficit) Comparison
(“Structural Balance” Standard)
($1,562)
($1,170)($1,188)
($1,155)
($1,185)
($2,400)
($2,000)
($1,600)
($1,200)
($800)
($400)
$0
Governor’s Proposal
2011 2012 2013 2014 2015
($1,562)
($426)
$25 $1 $30
($2,400)
($2,000)
($1,600)
($1,200)
($800)
($400)
$0
GOP House Proposal
2011 2012 2013 2014 2015
($ in Millions)
• The Governor’s Plan: – Relies too heavily on transfers, taxes & fees and wishful
thinking
– Continues a pattern of unsustainable growth in spending
– Does not eliminate the deficit
• The GOP Plan:– Represents new vision for Maryland
– Reduces unsustainable levels of spending
– Balances the State budget structurally
– Reduces the tax burden on Maryland citizens
– Cancels raids on the TTF, BRF and POS
– Increases funding to the TTF without a gas tax hike19
HOUSE REPUBLICAN CAUCUSSummary