MD Special Session Over, Now What?

Presumably, all the budget deficit problems facing the state of Maryland were solved during the three week special session of the general assembly called by Governor Martin O'Malley. Even the contentious issue of Slots (video lottery terminals) has been put off for another year and left for the voters to decide.

The MD general assembly also passed during the special session approximately 550 million in proposed spending cuts for the next fiscal year. While they were specific in regard to approximately 300 million in cuts, they graciously left the other 250 million in cuts up to the discretion of the Governor.

So now that all the excitement of the Maryland general assembly meeting in a special session is over, what's left to take action on when regular 90 day session begins in January?

Well to begin with, the Governor by Maryland constitution has to submit a budget to the general assembly and it must be balanced and approved by the end of the general assembly session. So the 550 million in spending cuts must be submitted by the Governor
and approved by the general assembly.

Look for some contentious discussions as to what services are being reduced and by what amount. Obviously, the Governor would be well advised to follow the suggested 300 million in cuts by the general assembly as that discussion has already occurred and consensus reached but where will the other 250 million in cuts come from?

Expect some serious battles here, especially in the area of reduced funding to county governments.

That leads us back to what exactly was accomplished by the approval of a Referendum on Slots. First, no money was received to offset the estimated 1.7 billion structural budget deficit of the state. Second, only five locations were approved with a limit of 15,000 video lottery terminals. Third, the amount of proceeds to go toward aiding the ailing horse racing industry in the state was negligible, and Fourth, a provision was passed which said in part, the state would adhere to local government enacted zoning which prohibited Slots in their jurisdiction.

So the possibility exists the the voters of Maryland could vote to approve the 2008 Slots Referendum with the five referenced locations, yet have local zoning ban Slots in these areas. The state would then be left with no added revenue in future years to fund the intended services proposed by the Governor.

Maryland would have been better served had their elected representatives done what they were elected to do and made the decisions as to the implementation and approval of Slots.

In addition to continued debate on funding reductions, there will be discussion on many other issues. Expect the death penalty in Maryland to surface again for discussion as well as a discussion on same-sex marriages.

Perhaps the Maryland Economic Development Corporation (MEDCO) will receive some attention. This entity was established by the state in 1984 to help develop properties for purposes that serve the public interest. Reportedly the net deficit of this program has tripled over the last several years. Is owning and operating the Rocky Gap Resort in Western Maryland at an annual loss in the best interest of the public? It is probably time to examine this program and conduct a cost-benefit analysis of the assets owned to see if some assets should be sold and whether this corporation is operating as it was intended.

As issues come up for discussion during the course of the regular session of the Maryland general assembly, keep an eye on the economy as we enter 2008. A reduction in projected revenues as a result of a downturn in the economy would have a significant impact on the budget and services provided by the state.

Outside of passing the buck on Slots, Governor O'Malley did a good job in the recent special session by providing the framework for, and building consensus toward, a solution to the state's 1.7 billion deficit. Time will be the judge as to the success of this legislation. The state will continue to face challenges in the future in many areas and it appears O'Malley is up to the task in facing them.