Franchot Blog

We just released the Board of Revenue Estimates' official report and I wanted to share it with you along with my thoughts. I strongly believe in being open about what the report truly means and dedicated to honestly dealing with the situation at hand.

Click here to download the Board of Revenue Estimates report (.pdf)

I am very pleased that revenue performance has, for the most part, been in line with the expectations of the Board of Revenue Estimates.

I want to be certain that we don't misconstrue the meaning of today's report - short-term revenue stability is not the same as total economic recovery.

Estimates for the remainder of the current fiscal year anticipate a decline in revenue of more than 5 percent, the worst revenue performance the State of Maryland has experienced in more than four decades.  As we move into Fiscal Year 2011, revenue is estimated to increase by only 3.6 percent, the 8th worst revenue performance in the State since 1969.  While today's report is relatively unchanged, the underlying assumptions for economic and revenue performance in the State of Maryland remain exceedingly grim.

While many of the pundits are quick to declare that the worst is behind us - there are clear signs that point to ongoing trouble in the economy:

The job market is still exceedingly fragile
As high as they are, the official U.S. unemployment rate of 9.7 percent, and the official state unemployment rate of 7.2 percent do not account for those who are underemployed, those who are afraid of losing their jobs, or those who have simply become frustrated and dropped out of the job market altogether.

The national and state housing markets remain exceedingly soft
Our nation's housing market remains mired in a vicious cycle of unemployment, foreclosures, market saturation and plummeting property values.  Foreclosure filings are still coming in at dangerous levels - here in Maryland, they're running about 40 percent higher than the year before, even though we did experience a month-to-month drop. Nearly 10 percent of the nation's borrowers are delinquent on their mortgages, and over 20 percent of homeowners are underwater - meaning they owe more than their house is worth.

The commercial real estate market remains poised for a severe correction, if not an outright collapse
According to a report issued last month by the Congressional Oversight Panel, $1.4 TRILLION in commercial real estate loans will expire between 2011 and 2014 and will require refinancing. The problem is that commercial property values have dropped more than 40 percent since 2007, and so nearly half of these properties are now underwater, can't be refinanced and are at risk of foreclosure.  

Our national debt is continuing to grow at an alarming rate
Debt continues to spiral out of control and now poses a direct threat to our nation's economic security. The debt crisis in Greece and elsewhere in Western Europe is a jarring reminder of the consequences of excessive borrowing and indiscriminate government spending.   

What we presented at the Board of Revenue Estimates is simply a reinforcement of what we, our friends and our neighbors already know. These warning signs, coupled with the dour economic and revenue assumptions that were presented today, should serve as a stark reminder of the tough choices that continue to confront our fiscal policymakers in Annapolis, and only reinforces the need for discipline and restraint moving forward.

Thank you for your strength and continued support of the State through these difficult economic times. Times are tough and it's important that we, as a people, remain tougher!

With just over a month left before the upcoming tax deadline, more Maryland residents are thinking about how they are going to file their taxes this year.  As you prepare your taxes, I'd like to encourage you to file electronically this year.

There are many benefits to filing electronically:

• You will receive your direct deposited refund within 72 hours of filing
• It saves the State money by eliminating paper waste
• It saves you time by allowing you to quickly and easily file online
• If you owe money, you can use direct debit and schedule a payment as late as April 30th

I encourage every Marylander to take advantage of this convenient way of filing their taxes, and for those who owe money, to use direct debit to hold onto their hard-earned dollars longer.  Since its inception in the early 1990's, electronic filing has saved the State roughly $14 million.

I hope to make this process as easy and pain-free as possible. For more information on electronic filling or to file free of charge, please visit my office Web site at www.marylandtaxes.com or call 1-800-MD-TAXES (1-800-638-2937).

I will be busy this week aggressively pushing for two important bills currently under consideration in the Legislature.  Together, these bills will strengthen Maryland’s public education system, economy and quality of life.

Financial Literacy in Our Schools
I have been a vocal leader in support of legislation to create a financial literacy requirement in Maryland’s public schools.  Tomorrow, I will be joined by a statewide coalition of students, teachers, parents and civic leaders to show our support for Senate Bill 264 (.pdf), which would require students to complete a financial literacy course in order to receive a high school diploma.

The press conference will be held in the Reception Room of the Treasury Building in Annapolis at 9:30am. 

Supporting Maryland Wineries
As a vocal advocate for Maryland’s growing wine industry, I submitted testimony today in support of House Bill 921(.pdf), the Maryland Winery Modernization Act.  This bill would allow Maryland wineries to market and sell their products more effectively, which in turn will allow them to expand and create new jobs.

This important legislation will help attract more tourists to the State of Maryland and generate both direct and indirect economic activity in our communities.  In so doing, House Bill 921 would provide a timely boost to Maryland's economy and business climate while supporting a “green” industry that safeguards our precious open spaces.

I encourage you all to contact your legislators and ask them to support these important pieces of legislation.  

Thank you so much for your continued support.

As you know, the Maryland General Assembly session is in full swing, and I'd like to take a few moments to highlight some of the important pieces of legislation currently under consideration in the House and Senate:

Taking Care of Maryland's Veterans
I have testified in support of two bills under consideration that would provide increased financial benefits to Maryland veterans.  Senate Bill 65 (.pdf) would add a check-off on your personal tax forms to contribute to the Maryland Veterans Trust Fund, a fund established by the State to provide financial assistance to veterans and their families, support vital programs for our veterans, and provide funding for the Charlotte Hall Veterans Home.

Additionally, Senate Bill 1(.pdf) and House Bill 1 (.pdf) would increase the State income tax exemption for Veterans to $10,000 - a 100% increase from the current exemption of $5,000.

Strengthening Maryland's Knowledge-Based Economy
I recognize the importance of Maryland's technology and life sciences sectors to the health of our state's economy, and recently testified in support of Senate Bill 64 (.pdf), which would extend the State's Research and Development Income Tax Credit. This tax credit has been vital to Maryland's emergence as a global leader in high growth areas such as the life sciences, information technology and nanotechnology. Continuing this credit will allow Maryland to maintain a competitive advantage for the highly skilled jobs and investment that the technology sectors create.

Fostering Economic Opportunity and Fairness
I have worked closely with Governor O'Malley in my role as a member of the Board of Public Works to support minority and women-owned businesses in Maryland.  I recently testified in support of Senate Bill 2 (.pdf) and House Bill 222 (.pdf), which would extend the duration of a key task force that is working to identify recommendations for stimulating investment in successful minority and women-owned businesses.

I encourage you all to contact your legislators and ask them to support these important pieces of legislation.  To find your legislators and their contact information, please visit http://mdelect.net/. 

Tax season is coming up. Watch Peter's latest YouTube video for a bit of advice:

I have spent the past several months emphasizing the need for a financial literacy education graduation requirement in Maryland's public schools.  Our nation's painful economic crisis has reminded us that far too many of our neighbors lack an understanding of the proper use of credit, the risks of excessive debt, the principles of sound household budgeting and the importance of saving for the future.

I am pleased to report that legislation has been introduced in the General Assembly that would require Maryland high school students to complete a standalone course in financial literacy in order to graduate from high school.  Senate Bill 264 (.pdf) has been sponsored by Senator Anthony Muse and co-sponsored by Senators Kathy Klausmeier and Rich Colburn, while House Bill 335 has been sponsored by Delegate Jay Walker.  I am grateful to these lawmakers for their leadership on this landmark education reform and consumer protection initiative.  

Please thank Delegate Walker and Senators Muse, Klausmeier and Colburn for their support.

On Feb. 10th,  Senate Bill 264 is scheduled for a hearing before the Senate Education, Health and Environmental Affairs (EHE) Committee and I will be testifying to show my support.

Over these past several months, I have become truly inspired by the bipartisan, statewide coalition that has grown in support of financial literacy education.  I have visited those school systems that have already established graduation requirements, and have met those students and parents who now have the essential tools of personal financial security as a result. 

Please contact your legislators and encourage them to support Senate Bill 264 and House Bill 335.  

To find your legislators and their contact information, please visit http://mdelect.net/. 

On Jan. 20, along with my colleagues on the Board of Public Works, I voted to approve $187.5 million in new construction funds for school systems throughout the State.  I applaud Governor O'Malley and the legislature for their continued commitment to funding our schools' construction, even in the midst of difficult financial times.

Recently, I've traveled across the State to spend time with local education leaders to discuss the successful efforts underway across Maryland to address critical issues such as: overcrowding, modernization of buildings, and making our school more energy efficient to meet higher standards of "green" building design.

Whether the project is a new facility or renovations to an existing one, it is important that these projects be environmentally sustainable, and that they create job opportunities for women and minority-owned and Maryland-based businesses.

Comptroller Peter Franchot visits Washington High School in Princess Anne.

See more photos from my visits on Facebook.

In these tough times, when money is tight, we must diligently take care of what we already have. Improvements to where our children learn can make a tremendous difference.

Over the next several weeks, I will be touring the State to see how taxpayer money has already been invested and to learn, firsthand, about the unmet needs that still exist.  The tour began on Jan. 21 at Washington High School in Princess Anne, and continued on Jan. 25 at Leith Walk Elementary School in Baltimore City.  I will continue to make similar visits throughout the State.

See more photos from my visits on Facebook.

Tomorrow, the Comptroller will visit Washington High School in Princess Anne.

The 30-year-old high school building in Somerset County is currently undergoing an extensive renovation and the Comptroller will be taking a tour to view the progress. The school is undergoing a four phase multi-million-dollar renovation. The state's Interagency Committee on School Construction recently recommended an additional $6 million in funding for the project to the Board of Public Works, on which Franchot serves.

This visit is a part of Franchot's tour of schools statewide recommended to receive state funding.

As we continue to work through tough economic times, I am more committed than ever to protecting Maryland taxpayers from fraud and abuse. That is why I released the "Maryland Taxpayer's Bill of Rights" (.pdf) last week.

The tax filing process can be confusing, and even intimidating, for so many people. I hope this publication will help you know your rights as you get ready for tax season. You deserve to know your rights, as well as what you can expect from my office when filing a tax return.

This helpful guide also includes tips that you should consider when selecting a tax preparer. A tax preparer should never:

• promise you a refund before looking at your financial information
• guarantee you a larger refund than another preparer
• ask you to sign a blank or incomplete return
• ask you to sign a return in pencil
• claim they have a special relationship with the Comptroller's Office or IRS

Download the Taxpayer's Bill of Rights (.pdf)

My office also offers free tax preparation at any of our 11 branch offices across the state. All you need to do is bring a completed federal return and a copy of your W2 information, and professionals within my agency will prepare and electronically file your return for FREE.

Visit www.marylandtaxes.com for more information, as well as a list of branch office locations

Thank you.

Thanks to Marylanders like you, we eclipsed our $10,000 goal, and, we eclipsed our $15,000 goal. In total, we raised $27,785 online in just a few weeks.

It's clear that Marylanders across our state appreciate independent, fiscally responsible leadership. As the General Assembly begins, I will continue to push for reforms that will make our state and our people more fiscally responsible.

One of the top items on my agenda for the upcoming session is to equip our kids with the knowledge they need to be financially aware. I am working hard to require that all high school students pass a financial literacy class prior to graduating high school.

In response to my work in the Comptroller's office, NBC 4 Washington recently reported that "Maryland really seems to be pinching pennies." I'll continue to work to make the Comptroller's office more efficient and I will continue to be a voice for fiscal responsibility on the Board of Public Works.

Thank you once again for your help, your support and your confidence.