Buyouts and cuts featured heavily in new Maryland budget

Lawmakers in Maryland are facing a huge budget deficit. Image: Wikimedia Commons

State budget time is here again, and shortfalls are plaguing almost every state. Maryland is attempting to fill a $1.6 billion shortfall using emergency money and creative tactics. With several unfunded long-term liabilities, however, the state may have to take on more than a single year’s budget.

The Maryland budget shortfall

The Maryland state budget is currently facing a $1.6 billion shortfall for the fiscal year. Governor O’Malley is proposing that the full budget shortfall be filled without adding any taxes or fees to the state budget. Beyond the individual year’s deficit, Maryland also has more than $18 billion in unfunded pensions due in the next 25 years. There is also an estimated $15 billion in Medicare, Medicaid and health care costs.

Addressing Maryland’s budget deficit

Democratic governor O’Malley is proposing several reforms to help fill the budget shortfall. There will be several million, if not billions in cuts to state budgets. State employees, however, will also be providing a large amount of the emergency money the state needs to make ends meet. The state is inviting applications for a buyout offer — where the state pays employees to leave their jobs. There have already been 1,500 applications for buyouts, most of which the state is very likely to accept.

Health care costs a point of contention

A point of contention for a large part of the Maryland legislature is health care. There is a huge deficit built into the system. Long-term care providers in Maryland are already facing over $180 million in budget cuts. States are responsible for a significant portion of the costs of Medicare and Medicaid, and with budgets being stretched to the limit, the amount they are willing to pay is going down. For many long-term care facilities, that means trying to care for seriously ill patients on less and less money every day. In Maryland, no additional fees or taxes mean they could have to try and make do with even less.