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Employees of the state Department of Labor, Licensing and Regulation who are processing unemployment insurance claims are exempt from furloughs in the new fiscal year, which started Thursday.

Fiscal 2011 brings with it another round of furloughs for most of Maryland's 79,000 state employees; like the unemployment claims processors, about 15,000 employees in round-the-clock health and public safety jobs are exempt.

Meanwhile, questions about state tax revenues and federal aid for Medicaid loom large as the new budget year gets under way.

The fiscal 2011 budget is built around projections of modest growth in state revenues. But fiscal concerns, from a $1.5 billion structural deficit to tens of billions in unfunded liabilities in retiree health care and pension costs, continue to mount.

"I think 2011 has always been anticipated to be ground zero," said Del. Murray D. Levy, a budget hawk who is retiring after six years on the House Appropriations Committee. "This is supposed to be the year when a lot of these problems are tackled, but we'll see."

The September report from the Board of Revenue Estimates, which comprises the comptroller, treasurer and state budget director, will be "the first real snapshot" of the fiscal 2011 landscape, Levy said.

That is when final revenue totals for fiscal 2010 will be known.

The most recent revenue estimates, released in March, said fiscal 2010 revenues would fall $66 million short of prior projections. But the board did not change fiscal 2011 projections of about $12.7 billion in revenues, an increase of 3.6 percent over fiscal 2010.

The O'Malley administration is taking a no-news-is-good-news approach to revenues after a fiscal 2010 in which the state Board of Public Works, consisting of the governor, comptroller and treasurer, cut $1.1 billion from the budget.

The revenue estimates showed "we wouldn't be back at the Board of Public Works four and five times like we have the last couple of years," said Shaun Adamec, spokesman for Gov. Martin O'Malley (D). "It appears the days of the hundreds of millions of dollars in budget cuts are behind us."

Monthly revenue reports through May show the state could see $200 million in surplus in its general fund reserve by the fiscal 2010 budget closeout, Adamec said.

That would be "a major bump," said Levy (D-Dist. 28) of La Plata. "Let's wait and see. I hope he's right."

A general fund surplus could help close a gap in the fiscal 2011 budget should Congress fail to front $389 million that would extend federal stimulus funding for Medicaid by six months through the end of fiscal 2011.

Other help could come from the 2010 General Assembly's approval of cuts that left a $200 million fund balance and from a plan to transfer $200 million from a local income tax reserve fund should the federal aid not come through.

Maryland has relied on the stimulus aid to prop up the state budget during the past year and a half, and state officials are optimistic the aid extension still could be on the way.

"Our folks in Washington, [D.C.] tell us there's still a very good chance for it," Adamec said.

The U.S. House of Representatives cut the aid from a taxes and jobs bill passed May 28. Republicans have, under the threat of a filibuster, blocked the funds from Senate approval.

With the possibility of a surplus added to the fund balance and transfer authority approved by the legislature, "it looks like the governor could rebalance the budget without any new cuts, even if Congress never extends this Medicaid funding," said Neil Bergsman, executive director of the Maryland Budget and Tax Policy Institute, a nonprofit research organization that analyzes the budget.

In the meantime, Maryland can afford to wait, Bergsman said.

"I think whoever finds in November that they're going to be governor should wait until the end of this calendar year to see what Congress does," he said.

Even if the revenue trend is upward, fiscal 2011 will be a year when Maryland feels the budget pinch, Bergsman said.

In its March report, the Board of Revenue Estimates wrote: "The recession may be over, and Maryland's economy has not contracted as much as the national economy, but the effects of the recession will linger."

Such effects include five to 10 furlough days for state employees based on pay grade, and the elimination of more than 700 state jobs. O'Malley proposed cutting more than 200 state government positions, including 44 that were filled. The legislature called for O'Malley to cut an additional 500 state jobs by the end of fiscal 2011.

"The good news is it appears the freefall may have ended," Bergsman said. "But we are stuck at a point where we have this year's needs and the level of revenues we had four years ago."