Maryland has more than $1 billion in unspent revenue as lawmakers prepare for the 2019 General Assembly session.
The budgetary boost comes thanks to the state’s increased revenue from the 2017 federal tax plan and the Supreme Court ruling in South Dakota v. Wayfair, which concluded that states can impose a sales tax even when an online retailer has no physical presence in the state.
“As we chart a course for the state’s fiscal future, it is incumbent upon our policymakers to make thoughtful decisions on the path forward when it comes to how we spend the taxpayers’ hard-earned dollars,” Comptroller Peter V.R. Franchot (D) wrote in prepared remarks for a Board of Revenue Estimates meeting in Annapolis on Wednesday.
The unspent revenue was announced even as the board – which is comprised of Franchot, State Treasurer Nancy K. Kopp and Budget Secretary David R. Brinkley – revised revenue projections for the current fiscal year and fiscal year 2020 slightly downward, by 0.1 percent and 0.3 percent respectively.
Part of the change in projections is the fact that the state continues to see stagnation in wage growth and permanent, long-term employment, critical indicators for the state’s fiscal and economic outlook, Franchot said.
He thinks the state should increase its allocation to the Rainy Day Fund, especially given the unexpected windfall.
Maryland is in the 113th month of economic expansion since the Great Recession. The only expansion to run longer was 119 months during the tech boom in the 1990s, Franchot said.
“We’re six months out from that historic benchmark, and we cannot expect that we will defy the laws of economic gravity, and we must plan for the inevitable economic downturn that will occur in the future,” the comptroller wrote.
Franchot, who took office the year before the Great Recession, recalled the budget cuts, furloughs and tax increases among the tough decisions made by then-Gov. Martin J. O’Malley (D) and the General Assembly to balance the state’s books.
“We have to show Maryland taxpayers that we learned our lessons from the Great Recession, and that we – like so many working families and small businesses – are going through our budget line-by-line and foregoing the things we want, in order to pay for the things we need,” Franchot wrote, while acknowledging that lawmakers will face a long wish-list next session, including massive spending requests for public school construction and reform.
The most recent revenue figures were posted online: https://content.govdelivery.com/attachments/MDCOMP/2018/12/12/file_attachments/1122543/BRE%20Rev%20Table%20-%20Dec%202018.pdf