Maryand faces HUGE revenue shortfall....didn't we play this game last year?

On queue.... with the slumping housing market and the topped out consumer not driving around buying stuff they do not need the states treasury has taken a major hit. The story over at the Sun paints a somber picture.

A litany of painful economic news hit home yesterday when Maryland's fiscal leaders learned the state faces a $432 million revenue shortfall that could rise to nearly $1 billion in the next fiscal year.

Slumping tax revenues will mean steep state agency budget cuts in the months ahead, and will require Gov. Martin O'Malley to scale back the spending plan he presents to the General Assembly in January. State leaders have begun meeting to decide where to trim hundreds of millions of dollars, and some have discussed eliminating employee pay raises and shifting teacher pension costs to counties.

The bad news is expected to continue. O'Malley plans to announce today that his administration will delay $1.1 billion in transportation projects over the next six years. The projects are funded through a transportation account distinct from the general budget.

Ok so Maryland raised the income and sales taxes last year. The federal government could let the Bush tax cuts expire next year out of inertia(blame it on them is going be a theme next year for all tough decisions), and the counties are starting to freak out with 30% shortfalls because the great house flipping transfer tax budget padding is gone.

We all need to be involved in this and demand the politicians cut budgets, freeze hiring and likely freeze salaries. This is going to be the new reality. We are heading into a L shaped recession which means L shaped revenue projections. We have a lot of cushy bureaucrats making high salaries that you have to wonder, what exactly are they doing? Why is this person getting cream of the crop health and retirement benefits while the Carpenter who helped build houses these past 10 years is out of work?

One of the things being brought to the front again is slots. Seriously I am tired of the slots as a revenue solution. We all know that the social costs are high and really why is robbing the gullible considered ok but somehow we can't get more affordable college tuition which would be of a better way to drive growth by higher skilled jobs?

The dire forecasts are likely to bolster the call from some quarters for voters to approve the legalization of slot-machine gambling in the state through a November referendum, which would bring a new revenue stream to state coffers. The projections also have stoked a debate over the level of state spending. Lawmakers are required to adopt a balanced budget, and if state revenues fall short of expectations during the year, the Board of Public Works has the authority to roll back spending. Budget Secretary T. Eloise Foster declined to say where possible spending cuts might be made but said: "There will be no sacred cows."

How come the county and state governments did not fill up the rainy day funds with all this revenue when times were good? Why is it that the taxpayers in this state have not yet revolted? Is this the year it finally happens?

And what happens to boy wonder governor, you know the guy who was all going to lower our power bills back down to levels of 20 years ago with artificial caps, but instead of gets in the way new power plant construction? This is not Baltimore City where you just raise taxes because your voters won't stand up and fight city hall. He's going to have to do something he's never had to do yet, cut off the democratic voters on the pubic dole looking for their handout. This is not just some poor joe with an $8 hr make work job, but also the 100k+ salary jobs that need to go. We'll see if he has the leadership to rise above cronyism and do the right things to balance the budget.