Sep 8, 2008 11:55 am US/Eastern
Franchot: Revenue Estimates Will Be Sobering
ROCKVILLE, Md. (AP) ―
Maryland Comptroller Peter Franchot said revenue estimates he is expected to release Tuesday for the two fiscal years through mid-2010 will be a "sobering window" on the state economy and warned legislative leaders will not be able to count on growth to solve budget problems.
Franchot, speaking Monday before the civic group Committee for Montgomery, called for a panel to look into state spending reform. He was critical of last year's special legislative session to deal with a looming budget deficit, saying lawmakers missed an opportunity to make needed spending adjustments and instead raised taxes, including an ill-advised computer services tax that was later repealed.
"Sound familiar? Yes, it sounds like a replay of 18 months ago," Franchot said.
Franchot's office announced last month that Maryland general fund revenues were $73.5 million below forecasts for fiscal 2008, which ended June 30.
The comptroller said at the time that his office was still preparing revenue estimates for fiscal 2009, which started July 1, and for 2010 but added it was safe to say the state was in for more bad news. Franchot did not give any more specifics Monday, but warned that unlike the mid-1990s "we are not going to be able to grow ourselves out of a deficit."
Franchot criticized the special session for creating a hurried atmosphere that did not leave time for careful analysis, noting former Virginia Gov. Mark Warner took a year to carefully study his state's finances.
"We didn't even look at our spending practices," despite the growth of state government, adding that the special session "instead threw us deeper into the abyss."
Franchot also continued to speak out against the November referendum to authorize slot machine gambling, saying it doesn't guarantee any funding for education.
"Don't be fooled by those who say otherwise," Franchot said, adding slots will only benefit out-of-state gambling interests while costing the state money due to increased crime, corruption, traffic and bankruptcies.
"The time for gimmicks and quick fixes is over," Franchot said.
The comptroller also said he would oppose efforts to raise the state's debt ceiling, a motion which was expected to be made later Monday at a meeting of a debt affordability committee, which he serves on.
When asked for ideas on solving the state's budget problems, in addition to a spending review, the comptroller noted the abundance of universities and research institutions in Maryland, adding that the state receives $570 million in tax revenues from the life sciences industry. "That could double or triple" in the near future, Franchot said, adding he supports using state pension money to help grow that sector.
On spending reform, Franchot said he was a liberal Democrat who believes in government, but he also thinks "we can do things a lot more effectively."
(© 2008 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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