Structural deficit in Md. budget comes back like skin rash

Like a chronic skin rash that keeps coming back, the persistent structural deficits that legislators thought they had almost cured earlier this year are looming again for fiscal 2015, the legislature’s top budget analyst told lawmakers Wednesday.

There now appears to be a $400 million potential gap in next year’s budget, Warren Deschenaux, the chief of policy analysis, told the joint Spending Affordability Committee. A nearly $300 million surplus estimated when the fiscal 2014 budget passed in April has disappeared in the face of unplanned expenses and reduced revenues, and there may instead be an $87 million deficit. (See briefing report.)

“We’re not going to have money to carry over” into fiscal 2015, Deschenaux said, adding to what was considered a manageable $100 million “structural deficit” next year. Structural deficits mean projected increases in spending that exceed revenues because of entitlements, mandated increases, wage and price hikes.
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