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Maryland budget hawks are wishing fiscal 2009 good riddance but are not greeting fiscal 2010, which began Wednesday, with thoughts of a happy new year.

Legislators left Annapolis in April after passing the fiscal 2010 budget with the cushioning of a projected balance of $96 million.

That cushion has disappeared in the two-and-a-half months since Sine Die.

General fund collections, which include individual income and sales tax revenues, were down 19.6 percent in May vs. May 2008, according to a June 11 letter to Gov. Martin O'Malley and the General Assembly's presiding officers from Comptroller Peter V.R. Franchot (D).

The 19.6 percent represents a $188.2 million drop and continues a downward spiral that has left a $200 million to $300 million budget gap for fiscal 2009, which ended Tuesday.

Last month, O'Malley (D) called on state agencies to consider eliminating services as part of a list of recommended reductions he asked each agency to submit by June 5.

O'Malley has yet to reveal details of the potential $200 million in cuts that he is likely to take before the state Board of Public Works for approval later this month. The board comprises O'Malley, Franchot and Treasurer Nancy K. Kopp (D).

Maryland's constitution requires that the legislature pass a balanced budget. It managed to do so before adjourning in April, but the continued downward slide of revenues means the state is operating in the red as it closes out fiscal 2009 and enters fiscal 2010.

The budget office won't close the book on fiscal 2009 until the end of August. The Board of Revenue Estimates report in September will provide a starting point for building the fiscal 2010 budget.

"Based on what we're seeing on revenues, the [fiscal 2010] budget is out of balance," said John W. Rohrer, coordinator of fiscal and policy analysis for the Department of Legislative Services, the nonpartisan research arm of the legislature.

The recession is expected to continue to erode state revenues well into fiscal 2010, Rohrer said.

Cuts of $200 million are not likely to be enough to make a dent in the long-term budget picture. The state faces a $1.7 billion structural deficit due to ongoing expenditures outpacing revenues.

Maryland is not alone. At least 48 states addressed or are still addressing shortfalls in their fiscal 2010 budgets, according to an analysis by the Center on Budget Policy and Priorities, a Washington, D.C., think tank. California Gov. Arnold Schwarzenegger (R) ordered lawmakers back to Sacramento last month for a special legislative session to resolve a fiscal 2010 budget gap that has grown to $26.3 billion.

"Although we are not in as bad a shape as California, which is issuing IOUs, we are in a serious financial crisis in Maryland that needs to be remedied," Franchot said.

But don't look for Franchot to press O'Malley for a special session. He opposed the 2007 special session that used a series of taxes, cuts and the passage of a plan for slot machine gambling to close a $1.5 billion structural deficit. In 2002, lawmakers passed a K-12 education plan without identifying a revenue source to fund it, creating a large part of the gap.

"It was a bad idea to raise taxes just as the recession was starting," said Franchot, who ardently opposed slots. Lawmakers should avoid further tax hikes during the recession and take the opportunity to do a comprehensive analysis of the state's entire $30 billion in spending, he said.

"We either do it in an analytical way, or we can do it at the end of a gun," Franchot said.

It is clear now that the legislature did not cut deep enough in 2007 or this year, said Del. Steven R. Schuh (R-Dist. 31) of Gibson Island.

"Things now look worse for the immediate future than things looked in 2007 for the then-immediate future," he said.

Unlike 2007, when the legislature turned to the state's Transportation Trust Fund and other pots to close the gap, "for all intents and purposes there is nothing less than the [$650 million] rainy day fund as far as fund balances," Schuh said. It would be "quite unwise" to tap into that account, he said.

So far, the legislators have not had the political will "to bring the books fundamentally into balance," he said.

"The mathematics and the constitution don't allow you to do that forever. We've gotten away with it about as far as we can get away with it."