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Report Finds Maryland Budget Puts $37 Billion On “Autopilot”

More than 82 Percent of State Budget Subject to Mandated Spending Formulas

Economic & Fiscal Policy, Taxes

PRESS RELEASES

JANUARY 26, 2017 Bookmark and Share

ROCKVILLE, MD (January 26, 2017) – A new study finds that 82 percent of Maryland’s $40.4 billion state budget is controlled by mandated spending formulas rather than elected representatives, signaling the extent to which lawmakers have put taxpayer money on autopilot. The report from the Maryland Public Policy Institute offers recommendations for how Maryland lawmakers can rein in mandated spending and exert greater control of over how taxpayer money is treated. The full report can be viewed at mdpolicy.org.

“Maryland’s budget ballooned by 39 percent in just ten years due in large part to mandated spending,” said Christopher B. Summers. “As a result, our state government has accumulated nearly $2,900 in debt per every Maryland resident.  We encourage Maryland legislators to turn off autopilot and exercise greater discretion over taxpayer money.”

The report offers the following recommendations to reign in mandated spending and fix the State’s structural budget deficit:

Align mandatory spending with state revenue: Change the growth rate in mandatory expenditures to be equal to the growth in total revenues. If total revenues only grow by 2 percent, mandatory expenditures and entitlements only grow by 2 percent.

Freeze the quantity or percentage of mandatory expenditures:  The Governor’s office proposed a policy in which any new mandatory expenditure must be countered with a repeal or reduction of existing mandates.

Enact structural tax reform:  Maryland can reform its regulation and tax structure to increase revenues without dramatically increasing the burden to its citizens. These options include broadening the state’s tax base to become more business friendly, eliminating targeted tax incentives that fail to deliver economic development.

View the full report at mdpolicy.org. The report was written by Adam J. Hoffer, Ph.D., assistant professor of economics at the University of Wisconsin – La Crosse. He earned his doctorate in economics at West Virginia University in 2012 with emphases in public economics.

About the Maryland Public Policy Institute: Founded in 2001, the Maryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society.  Learn more at mdpolicy.org.

 

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Related Links

The Maryland State Budget and Mandatory Spending