O’Malley Continues Spending Spree – Budget Conference Stalls 4/09

Last weekend, the Senate and House conferees were separated by a few million dollars in deciding which additional spending reductions were necessary in order to provide a better cushion for the FY10 budget.

The Governor’s original budget left a fund balance of only $45 million.  Both chambers wanted more reserves in the fund balance in case state revenues continue in their free-fall during this spring and summer.  So far, the difference in conference was that the House did not want reductions as deep as the Senate which had crafted a $150 million fund balance.

All of those deliberations were blown out of the water when Governor O’Malley introduced a second supplemental budget on Monday.  With the budget already passed by both houses and only one week left in the session, O’Malley now proposes adding almost $1 billion in new spending.

The $1 billion ($903,035,833.00 to be exact) in new spending skips the budget committees and goes directly to the 10 conferees in the conference committee.  No hearings, no testimony, no debate, no transparency.

To add insult to injury, legislators are weary from the excruciating process of whittling away $488 million in spending reductions that were left to them with no recommendations from O’Malley’s first supplemental budget.

The budget committee legislators are also frustrated that after doing the “heavy lifting,” O’Malley then comes in with budget growth to ongoing expenses that will add to the state’s baseline.  While initially $823 million of the new spending is federal funds, a healthy portion of it is used to grow ongoing programs of the state instead of being restricted to one-time spending.

No doubt that with the new spending, revenue growth will have to top 15% in two years to supplant the loss of federal funds – a feat even the most optimistic budget analyst knows is impossible.  (to see our prior post on baseline budget growth click here).

And with regard to the issue of the fund balance, O’Malley ignores the pleas of the legislators and drops the fund balance in the second supplemental to a figure ($40 million) even lower than his original budget.

Under O’Malley, the spending just never ends.