Tax bump boosts state budget surplus

Surge in tax collections, spending cuts give Maryland $295 million budget surplus

Buoyed by a surge in tax collections, Maryland finished the year with a $295 million budget surplus, new figures show. The state's comptroller and governor differed Thursday over whether that means the state's economy has rebounded, but agreed it's not time to loosen the reins on state spending.

Tax revenues jumped 5.1 percent in the past year, Comptroller Peter V. Franchot announced. The state closed out its fiscal 2015 budget with $15.9 billion in revenue, which was $214 million more than officials had forecast would come in. The biggest chunk of the increase came from higher personal income tax collections.

Gov. Larry Hogan stressed that $84 million in higher-than-projected agency spending cuts also contributed to the surplus. The trims reflect his administration's efforts to curb spending, he said, while the increased tax collections suggest Marylanders and state businesses are making more money.

"All this points to a growing economy that puts us on a positive path moving forward," Hogan said in a statement.

Franchot said the budget news was cause for "cautious optimism," but said he believed the state's economy remains fragile and hasn't regained its pre-recession growth. He pointed to continuing federal spending cuts, relatively high unemployment and little or no wage growth.

Both officials, however, agreed it's not time to stop squeezing agency budgets. Hogan said he thought the extra money should be used to "further stabilize the state's finances, address our pension obligations or be put back into the pockets of taxpayers." Franchot said he believed that the surplus "must be saved and not spent" in recognition of what he called the "uncertain fiscal and economic climate."

Tim.wheeler@baltsun.com

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad
43°