State Analysts Brief Lawmakers On Budget

Debt service payments are expected to grow from $151 million in fiscal year 2010 to $288 million in fiscal 2016 — an increase of $137 million.

"So you can see with this issuance of debt, there does come a cost, and that may be something the General Assembly will want to consider — whether or not relying on that much debt for the capital program is really fiscally prudent," Jonathan Martin, a senior policy analyst with the nonpartisan Department of Legislative Services, told lawmakers during a joint hear of House and Senate lawmakers.

Debt outstanding is projected to grow from $1.6 billion in fiscal year 2010 to $2.5 billion in fiscal year 2016.

"They're approaching their statutory debt outstanding limit," Martin said. "In 2016, the debt limit's about $2.6 billion debt outstanding. They actually get to $2.5 billion based upon their estimates."

Bond sales have increased by $65 million over fiscal year 2011 and 2016 to help fill budget holes while maintaining capital spending.

Gov. Martin O'Malley submitted his fiscal year 2012 budget to lawmakers on Friday. The proposal includes $100 million in fund transfers from the transportation trust fund to the state's general fund.

Budget analysts also pointed out the potential for up to $245 in underfunding in the general fund. Medicaid rate adjustments relating to fiscal year 2011 underfunding could require $100 million to $125 million. The fiscal year 2011 budget also assumes $46 million in Temporary Assistance for Needy Families Contingency Funds. But only $12 million has been received. Congress has rescinded the remaining authorization, and analysts warned it's unlikely the rest of the money will come.