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A Miner Detail: The 2019 Annapolis Session Winners and Losers [EXCERPT]
April 12, 2019
Baltimore Business Journal:
Maryland cuts revenue projections by $126.5 million amid 'weak' sales tax growth
September 20, 2017
Maryland Comptroller Peter Franchot says state lawmakers need to accept a "new normal" after the state Board of Revenue Estimates slashed its revenue projections by $126.5 million over the next two years.
The board, comprised of Franchot, Treasurer Nancy Kopp and Secretary of Budget and Management David R. Brinkley, reduced the revenue projection by $53 million to $17.1 billion for the current fiscal year, which began July 1.
It also cut the estimate for fiscal 2019 by $73.5 million to $17.6 billion.
Franchot attributed the reductions to "weak growth" in revenue from sales and use tax receipts, and a "modestly reduced outlook for average wage growth in Maryland." Consumer spending remains "unpredictable," he said, as wage growth remains slow and more people shop online.
Sales tax revenue for fiscal 2018 had the largest write-down by the board and is now expected to come in at $4.65 billion, a reduction of $72.2 million.
"We continue to experience the slowest and most tentative economic recovery of our lifetimes," Franchot said in a statement. "And as I’ve said in the past, I think that it would be imprudent to expect a return to pre-recessionary patterns of economic expansion."
Over the last few fiscal years, the state "barely attained" 2 percent growth in sales receipts, Franchot said, compared to previous estimates of 3 percent to 3.5 percent growth. "Meager income growth" and "political uncertainties coming out of Washington" have led to the decline, he added.
“As we continue to weather these uncertain economic conditions, Maryland working families are understandably putting more money in the piggy bank instead of spending on things they want, instead of need," Franchot said.
The change in consumer spending habits is also making it harder for businesses to survive, Franchot said.
State lawmakers need to accept a slower rate of growth as the "new normal," Franchot said, urging them to continue to practice fiscal restraint. The General Assembly must reject any proposals that would increase or create new taxes and fees, he said, and refrain from accumulating additional debt.
"We must establish a business climate that is characterized by stability and predictability, one in which employers feel comfortable investing capital and creating good-paying, long-term jobs," Franchot said.
The board's release offered the first look at the fiscal 2019 projections. In addition to the $73.5 million revenue projection cut, here are some of the other notable numbers.
Individual income tax revenue is projected at $9.8 billion, a 4.1 percent increase from the current fiscal year.
Revenue from corporate income taxes is estimated to grow 5.6 percent to $873.6 million.
Sales and use tax revenue is projected at $10.6 billion, a 4.2 percent increase from the current fiscal year.