Maryland faces a revenue shortfall of $238 million over the next 15 months, state officials warned Thursday, necessitating tough choices in balancing the state’s budget in the final weeks of the General Assembly.
The Board of Revenue Estimates adjusted downward what it had projected in December the state would collect in fiscal 2014 and 2015 from taxes, gambling proceeds and other sources. Revenue for the remainder of this budget year was expected to be $127 million short, while the shortfall for the next year was projected to be $111 million.
The board is made up of Comptroller Peter Franchot, Treasurer Nancy Kopp and Eloise Foster, state secretary of budget and management.
Board members blamed weaker-than-expected economic activity in the final months of 2013, including the federal shutdown and other budget cuts, plus severe weather in recent months, for much of the shortfall.
“There’s just no glossing over the economic challenges we face,” said Franchot. But both he and Kopp said they are “cautiously optimistic” that the state’s revenues will gradually improve as the months wear on.
Calling the projected shortfall “quite concerning,” House Minority Leader Nic Kipke called on Democrat-led budget committees in House and Senate to “exercise true fiscal responsibility” as they put together the state spending plan for fiscal 2015.
On the other hand, Benjamin Orr, executive director of the Maryland Center on Economic Policy, argued that the shortfall should persuade lawmakers to abandon proposals cut estate or corporate income taxes.