Thanks to a late infusion of federal funds, Maryland ended one of its toughest budget years in decades with an approximately $122 million surplus -- less than half the amount it had on hand when it closed the books on the previous year.
The final number on the fiscal year that ended June 30, released yesterday by the state Comptroller's Office, shows that the state would have had a $757,000 deficit if not for an infusion of $33.4 million in U.S. aid to the Medicaid program and $90.4 million in other federal money.
Gov. Robert L. Ehrlich Jr. said President Bush's tax cut bill provided much of that money.
"It's good, but it's a one-time shot. We're not relying on one-time shots to get us through," Ehrlich said, adding that the state must make up a shortfall of $400 million to $600 million in next year's budget.
"It's fair to say we've made progress. We've cut a billion dollars. We've taken substantial steps. We're not home safe. We're not into good times by any means," the governor said.
The fiscal review by the Board of Revenue Estimates shows that all of Maryland's largest revenue sources -- the income and sales taxes and the lottery -- fell short of projections during the year.
Sales tax revenue grew 2.1 percent, making fiscal 2003 one of the three weakest years in the past 20, according to board Director David Roose.
The shortfalls from the state's major revenue sources were largely made up for with unexpectedly high gains from "miscellaneous" revenue sources, the report said.
Roose found one silver lining amid the gloom: the stock market.
"With an apparent end of the bear market, the double-digit declines in realized capital gains will likely come to an end, as will the declines in estimated income tax payments," he wrote.