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Escaping the deficit trap

Governor-elect Larry Hogan didn’t even have a chance to finish his thank-you tour before getting a nasty budget surprise: The state’s deficit for the coming year has jumped from $400 million to $600 million, and it’s on a course to hit $1 billion by 2020. To make matters worse, the state’s job growth over the last year was one of the five lowest in the country. It’s a tough time to take the helm.

The governor-elect is getting advice that slashing taxes will create jobs, but that didn’t work for Kansas Gov. Sam Brownback. And after his anti-tax campaign, Mr. Hogan certainly can’t raise taxes to plug the gap.

What he most needs is a plan to boost economic growth as federal spending in the state dwindles, falling by $1.2 billion last year. The federal government has gone from being an engine driving the region’s economy to a brake slowing it down. For the foreseeable future, there’s no prospect of more federal employees with bigger paychecks to spend or more contractors spinning off more jobs.

Read full article here from Baltimore Sun

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