In a sign that Maryland's economy continues to creep back from recession, the state announced yesterday that revenues for fiscal year 1995 will be about $148 million more than expected.
Compared with Maryland's estimated $13 billion budget for next year, the extra money is minuscule. The state government could gobble it up in four days.
But, for Gov.-elect Parris N. Glendening, it may provide a little cushion as he considers selective business tax cuts in an effort to create more jobs in the state.
"This session and next session we will have some reductions in business taxes," Mr. Glendening said yesterday. The governor-elect, how ever, declined to give any details of his plans. "I don't want to float them out right now because they will become gospel quickly," he said.
The state Board of Revenue Estimates attributed the improved outlook partly to increased corporate profits, a strong performance in the sales tax and a better-than-expected showing by the state's instant lottery and Keno games.
Much of the modest windfall, however, may go to unanticipated costs in this year's budget, said William S. Ratchford II, director of the state Department of Fiscal Services. The state may need as much as $90 million to pay for higher-than-expected caseloads in the areas of welfare, medical assistance, foster care and juvenile services, he said.
The board -- consisting of state Comptroller Louis L. Goldstein, Treasurer Lucille Maurer and Budget Secretary Charles L. Benton -- presented the figures to Gov. William Donald Schaefer yesterday to help him formulate his fiscal year 1995 budget.
Bucking the state's recent tax-cut sentiment, Mr. Schaefer said he intends to budget all the available money to help pay for education, economic development and public safety programs. "There's money here," he said. "And the needs of the people should not be overlooked."
In real terms, Mr. Schaefer's decision should have no lasting impact since he leaves office Jan. 18. But, by allocating the money, Mr. Schaefer will leave Mr. Glendening with the unpleasant task of cutting proposed programs at a time when he hopes to be enjoying a honeymoon with the legislature and the public.
Mr. Glendening said that, "with deference," he disagreed with Mr. Schaefer's decision and would rather hold on to the money to help make the business tax cuts.
"The only way we're going to be able to do that is to make sure we get out of this habit of spending every penny that's available," he said.
Last month, voters nearly elected Republican House Minority Leader Ellen R. Sauerbrey governor after she had pledged to cut personal income taxes. The message of less taxes has permeated talk surrounding the next General Assembly session.