The failure of the Governor’s slots plan to bring in the anticipated $90 million in revenue serves as yet another example of the fiscal mismanagement that perpetuates Maryland’s structural deficit. Revenue estimates and forecasts are a necessity and have been part of the budget planning process for quite some time. However depending on unproven sources of revenue (slots, tax increases, federal stimulus, etc.) and spending money that has not been realized is an irresponsible practice that has only worsened our fiscal disorder.
In the 2007 Special Session, with the economic storm clouds clearly on the horizon, we questioned the anticipated revenue that was projected to come from the historic tax increase package. But, our warnings fell on deaf ears – the taxes were passed, the money was spent, and Maryland realized a real-time revenue shortfall of over $800 million in FY 2009 and a projected structural shortfall of over $2 billion for FY 2010.
Even now it is clear that lessons have not been learned. The Governor’s 2010 budget proposal included the anticipated $90 million in up-front license fees from slots. Maryland has only received a fraction of that amount, which only adds to the $2 billion structural hole. The Governor has also included $350 million in new Medicaid money from the federal government in his budget. It is clear that the Administration is hoping for more than $3 billion to rain down from the Obama bailout plan. As we have seen over the last week, there are no guarantees when or if that money will come. We must formulate a budget with reality rather that hope.