Legislative Budget Panel Recommends Dipping into Reserves to Address Anticipated Shortfalls
A bipartisan panel of Maryland legislators has recommended tapping the state’s Rainy Day Fund to help close an anticipated budget gap in 2022.
The Spending Affordability Committee voted unanimously Tuesday on several recommendations to guide the state’s 2022 fiscal year budget, including to lower the recommended level of reserves in the state’s Rainy Day Fund by about $200 million.
The recommendation would leave about $1 billion in the reserve fund at the end of the 2022 fiscal year, an amount equal to 5 percent of state general fund revenues. Traditionally, 5 percent of revenue has been reserved in the Rainy Day Fund, but recently the state has been holding 6 percent.
While state’s budget process is largely driven by Gov. Lawrence J. Hogan Jr. (R), the Spending Affordability Committee is charged with making recommendations for state spending, new debt authorization and state personnel levels. Since the committee was created in the early 1980s, the legislature has nearly always followed its recommendations.
Read more: https://www.marylandmatters.org/2020/12/16/legislative-budget-panel-recommends-dipping-into-reserves-to-address-anticipated-shortfalls/