Eight Maryland state agencies racked up more than $70 million in debt during fiscal 2010 that the state's general fund now must finance, according to a newly released audit. The excess spending is part of an estimated $245 million in potential underfunding analysts have pointed out in Gov. Martin O'Malley's fiscal 2012 state budget.
| Excess spending, losses in funding | |||
| Agency | Excess expenditures in fiscal 2010 | ||
| Department of Health and Mental Hygiene | $21.3 million | ||
| Maryland Higher Education Commission | $12.8 million | ||
| Maryland State Department of Education | $4.9 million | ||
| Department of Assessments and Taxation | $2.4 million | ||
| State Board of Elections | $699,779 | ||
| Agency | Loss in federal funding in fiscal 2010 | ||
| Maryland State Department of Education | $12.9 million | ||
| Department of Human Resources | $9.6 million | ||
| Department of Juvenile Services | $400,000 | ||
Five agencies charged $42.1 million more than the state had budgeted for them in the fiscal year
ending June 30, 2010, according to the audit by Maryland's independent Office of Legislative Audits.
Three agencies created an additional $22.9 million in debt by relying on federal funding that never came through, and the Maryland State Police incurred the remaining costs through an accounting mistake.
The state now must pay for the excess charges and federal funding deficiencies out of its fiscal 2012 budget, which O'Malley has to balance by closing a $1.4 billion shortfall.
To avoid additional cuts, O'Malley may write a "deficiency appropriation" into the budget and push the debt into next year, said state auditor Timothy Brooks.
"But that's not good because if you keep rolling [the debt] forward, it eventually catches up with you," he said.
The Department of Health and Mental Hygiene generated more than a quarter of the fiscal 2010 debt, according to the audit. And the state's budget advisers say they expect the agency to incur another hefty tab
at the close of fiscal 2011, for a combined cost of $37 million.
The Maryland State Department of Education and higher education commission also spent too much last year.
The Department of Education spent $12.9 million in advance of receiving expected federal funding for the Temporary Assistance to Needy Families grant, which never came through. The education agency also relied on TANF funding in its fiscal 2011 budget, which will create $34 million debt this year.
State agencies aren't the only culprits in pushing their spending limits.
The state's Medicaid underfunding in fiscal 2011 could require an infusion of $100 million to $125 million in general funds, and its low-income energy assistance program may need $25 million, according to John Rohrer, coordinator of fiscal and policy analysis for the state Department of Legislative Services.