State Budget: Worse than They are Telling Us

After years of  the state government spending more money than it takes in,  Comptroller Pierre Franchot announced recently that Maryland ended this fiscal year with a surplus.  One shouldn’t be deceived by the appearance of good fiscal news, however.

First, because most of that surplus  is due to the tax increases that Governor O’Malley pushed through the General Assembly.  Soon, you can bet, he’ll be proposing more places to spend that money.

Second, the surplus is illusory.  The  balance sheet, as we can usually expect from government accounting, doesn’t reflect all of the liabilities the state is carrying. A recent study by the Pew Center for the States shows that Maryland is actually in deep debt in terms of keeping up with its obligations for funding pensions.  The state pension plans have a liability of $ 71 billion, and
are poorly funded – not only by professional standards, but also well below averages for states across the country.  Most disturbingly, retiree health care funds are even worse, as they are only about 1% funded.  Maryland health care funding got the lowest grade possible in the report.

So take the reports of fiscal health (like most positive trumpeting from Annapolis) with a huge grain of salt.  Fiscally, we are still in very bad shape, and spending on health care is going to skyrocket soon.

Advertisements
Explore posts in the same categories: Budget and Taxes, Maryland, Uncategorized

Tags: , ,

You can comment below, or link to this permanent URL from your own site.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: