ANNAPOLIS — The Maryland Board of Revenue Estimates on Wednesday announced that they would be writing down expected state revenues for the 2016 and 2017 fiscal years by approximately $51.4 million from assumptions made last December.
State Comptroller Peter Franchot said the new estimates reflected weak sales throughout Maryland during the recent holiday season and that economic growth has continued to be stagnant in the last few months.
“Middle class families continue to struggle,” Franchot said. “This continues to be the slowest economic reality of our lifetimes. The fact we’re using the term ‘recovery’ seven years after the Great Recession shows how tough times still are today.”
Maryland’s total revenue in the 2015 Fiscal Year was approximately $15.922 billion. The December revenue estimate for the 2016 Fiscal Year was $16.435 billion, but the March revenue estimate increased that amount to $16.444 billion.
The December to March estimates indicate a net increase of $9.228 million in revenue. This bump, despite a $66 million decrease in estimated sales tax revenues, was due to gains in corporate income taxes, estate and inheritance taxes and taxes from the state lottery.
For the 2017 Fiscal Year, which runs July through June 2017, the Board estimated a drop in sales taxes of approximately $60.637 million from December estimates. No estimates have been made yet on other types of tax revenues for the 2017 Fiscal Year.
Franchot said that lackluster growth in both wages and high paying jobs affected Maryland’s economy.
“It’s no surprise that a lack of wages has led to weaknesses in retail sales, evidenced by the fact that expected sales and use tax receipts are being written down by $66 million for FY 16 and $60.6 million for FY 17. This means that consumers are continuing to rein in their discretionary spending,” Franchot said in a statement released at the time of the meeting.
State Treasurer Nancy Kopp displayed a slightly more optimistic tone during the meeting and said that employment is increasing in Maryland and the state is in sound shape, even if the economy hasn’t moved up as rapidly as some would like.
State Secretary of Budget and Management David Brinkley agreed that the state is fiscally sound, but cautioned that growth has been slow.
Earlier Wednesday morning, the Maryland Board of Public Works met in the state capitol and Gov. Larry Hogan said that over the first 45 days of the General Assembly, 85 new spending mandates were introduced that would total approximately $3.7 billion. He said he was concerned that the mandates, if passed, would increase the state deficit.
“If these reckless actions are enacted in the future, there won’t be a way to pay for them all,” Hogan said.
“Our mandated spending still outpaces revenue growth and this is an issue the legislature needs to address,” Brinkley said. “While we are optimistic about the state’s possibilities, Maryland still needs to exercise caution. In the event of a slowdown or a recession, we want the state to still deliver services without interruption.”
The Board of Revenue Estimates voted unanimously to approve the updated revenue estimates and The Board of Public Works voted unanimously in favor of every item on their agenda.
The Board of Public Works approved a $114,000 construction contract modification for the Harriet Tubman Underground Railroad Visitor Center, near the Blackwater National Wildlife Refuge in Dorchester County, to add a fire protection system redesign.
The Board of Public Works meeting lasted almost 40 minutes as Hogan called it, “incredibly fast paced.”