Friday, November 23, 2012
The only solution liberals have to today’s problems is spending money. Whether it’s crime, poverty or even unemployment, the answer for them is always to create a brand new program — never mind measuring whether similar efforts in the past yielded any positive results. An analysis by Maryland's Department of Legislative Services shows how this strategy eventually runs out of money.
Annapolis closed this year’s budget hole by hiking taxes on families earning more than $100,000 annually (which counts as middle class in expensive Montgomery and Howard counties), sloughing off some public pension liabilities to local governments and expanding gambling opportunities. It’s not going to be enough, as the structural deficit is expected to keep growing and debt service will consume an ever-larger share of incoming revenues. Gov. Martin O'Malley and the General Assembly squeezed taxpayers so much, there’s pretty much no room left to cover future shortfalls.
Public spending in the Old Line State has risen steadily over the last several years, at an average of 5 percent annually, while population increased less than 1 percent.Contrary to lawmakers’ claims, this year’s ominously named “Doomsday budget” didn’t actually cut spending. Maryland’s budget ballooned by $3 billion this year to $37.1 billion. Deficits are equally massive, weighing in at $1.8 billion in 2012 and $1 billion in 2013.
Those gaps were all filled with temporary fixes, leading to an increase in the public debt to almost $28 billion, a burden of more than $14,000 for each Maryland resident.The cost of servicing that debt will increase from about 6.5 percent in 2013, to about 7.5 percent by 2018. The latest figures from the Department of Legislative Services predict a deficit of over $400 million for 2014 and 2015. Those numbers could easily grow, depending on the outcome of negotiations in Washington over the fiscal cliff.