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Baltimore Business Journal: Comptroller Franchot says Maryland hasn't 'fully recovered'

Comptroller Peter Franchot painted a grisly picture of Maryland's economy after the Board of Revenue Estimates reduced its revenue projection for fiscal 2018 by $73.2 million.

The decrease of less than 1 percent means Maryland now estimates revenue to be $17.1 billion at the end of the fiscal year on June 30. Franchot said continued weaker-than-anticipated sales tax revenues and an inability to tax online retailers provided the basis for the board's actions.

The state board also continues to monitor the progress of the Republican tax reform bill moving through Congress and will take additional action if a final version gets passed.

"We're doing the best we can with the information we have," Franchot said in a statement. "But, here's what we do know and here’s what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession...the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven't fully recovered."

The state board also voted on Wednesday to increase the revenue projection for fiscal 2019 by $11 million to $17.6 billion.

Even as the stock market continues to rise and Maryland's unemployment rate hovers around 4 percent, Franchot said more people are saving their money rather than spending it back in economy.

He described wages and salaries as "lackluster at best." Those with good-paying jobs are choosing not to spend, Franchot said, because of uncertainty in Washington and "continued fiscal and economic challenges" facing Maryland.

Like he did in March, Franchot asked lawmakers in the General Assembly to not pass any new fees or taxes in the upcoming legislative session. The Democrat, who is running for reelection next year, also called on the General Assembly to pass a law requiring online retailers to collect and remit sales and use taxes. Forcing main street retailers to compete with online giants like Amazon puts them at a disadvantage, he said.

"This is not a new tax...or a new fee," Franchot said. "This is simply leveling the playing field for our small businesses that diligently comply with our sales and use tax laws against online retailers who have gotten away with not doing so because of legislative inaction."

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