As anyone who has ever struggled with credit card debt can tell you, when your spending outpaces your income for a while, “you’re gonna have a bad time.” Yet we seem willing to accept this kind of mismanagement—on a massive scale—so long as it’s the government that’s doing it.

Between 2006 and 2014, personal income in Maryland grew by 26 percent while state spending grew by 41 percent. Small wonder, then, that every year the state budget has had to rely on transfers from special funds and other tricks just to get within a few hundred million of being balanced.

The vast majority of the annual budget is predetermined by the previous year’s funding levels and mandates that certain areas (like education) receive more money each and every year. Governor Hogan’s administration said that 80 percent of the state budget comes from automatic spending formulas in a Ways & Means Committee hearing earlier this month attended by Christopher B. Summers.

With this “current services” approach to budgeting, legislators seeking to make cuts are forced to justify proposed savings instead of asking those in favor of spending being asked to demonstrate the effectiveness of state programs. In other words: the justification for most of the budget isn’t necessarily that programs are working—just that they existed last year and so must continue to exist next year.

At the conclusion of this year’s Legislative Session, the Maryland Public Policy Institute will release a new report highlighting a few key things that need to change for the state to shift its perspective and start budgeting more responsibly and more efficiently. In-depth recommendations include:

• Freezing spending at 2015 levels, keeping intact the net 5 percent increase in spending from the prior fiscal year to eliminate Maryland’s budget shortfall.
• Reorganizing agencies within the state executive branch while the spending freeze is in place with an eye towards finding savings in every agency’s budget.
• Adopting “outcome budgeting” to encourage agencies compete for funding based on a proven ability to deliver quality services or the creation of a workable action plan to use the budgeted money most efficiently.
• Placing a temporary moratorium on new debt to immediately reduce the projected debt service and overall debt load of the state.
• Doing a real cost-benefit analysis for capital projects, especially in public transportation.
• Tying the debt limit to property values, not revenue, to erase the incentive to increase property tax rates in order to increase revenue and also the debt capacity cap.
• Phasing in a spending cap tied to either personal income growth or a “population plus inflation” metric.

These reforms aren’t going to be easily swallowed by a legislature that has grown complacent. But if the Hogan administration can implement some of them, the state will be better off for it.