The Maryland agency that forecasts tax collections predicted Wednesday that the state will take in nearly $400 million more than previously expected this year and in 2019, giving the General Assembly and Gov. Larry Hogan some flexibility as they finalize the budget.
The Board of Revenue Estimates forecast that revenues for the current fiscal year, which ends on June 30, will actually fall nearly $40 million short of previous expectations. But the agency predicted that tax revenue for the budget year starting July 1 would come in more than $433 million higher, largely because of the impact of the recent revision of the federal tax code.
The new forecast is a stark contrast with past March estimates that brought unpleasant surprises as lawmakers scrambled to balance state budgets before adjourning in April.
Andrew Schaufele, the state’s chief forecaster, put the combined additional revenue at $394 million.
“In my five years doing this, we have never had this kind of money on the plate,” Schaufele said.
State Budget Secretary David R. Brinkley, a board member, sounded a note of caution. He said it was just 18 months ago, in September 2016, that the board had to write down its previous estimates by $365 million.
Because of volatility in the economy, Brinkley said, the state needs to “stay the course” and continue the policies adopted by Republican Gov. Larry Hogan.
Brinkley joined the other two members of the board, Comptroller Peter Franchot and Treasurer Nancy J. Kopp, in approving the projections
Maryland lawmakers, who have been in touch with the bureau’s staff, have already been factoring the expected results into their decision-making. For instance, the Senate Budget & Taxation Committee decided to keep about $200 million of the projected increase in reserve against expected future costs in K-12 education and health care programs.