xml:space="preserve">
xml:space="preserve">
Advertisement
Advertisement

Maryland expects to collect $60M less in taxes next year

As state lawmakers prepare to vote on changes to Gov. Larry Hogan's proposed budget, they're learning that they have less money to work with.

Updated estimates that were issued on Wednesday show that Maryland will collect about $60 million less in taxes and other revenue than previously thought. Hogan's budget proposal was based on the earlier revenue estimate, which was issued in December.

Advertisement

Even with the revised estimates, the state still has a surplus of nearly $400 million out of a $42.3 billion budget.

Hogan's budget secretary, David R. Brinkley, said the downward adjustment is a reason why state lawmakers should pull back on some of the mandated spending that is required in future years.

Advertisement
Advertisement

"Maryland still needs to exercise caution," Brinkley said.

Hogan sounded a similar theme a day earlier during a news conference with reporters. He is sponsoring a bill that would relieve the governor from having to fulfill spending mandates during tough economic times, though the bill is not expected to be approved.

The lower budget estimates may threaten Hogan's attempts to get lawmakers to pass tax and fee cuts.

Sen. Edward J. Kasemeyer, chairman of the Senate Budget and Taxation Committee, has said he expects to keep the cost of any tax cuts to between $50 million and $60 million per year. His committee plans to vote on changes to Hogan's budget on Thursday.

Advertisement

Hogan's office did not respond to a question about the fate of his proposed tax cuts, but issued a statement saying the governor has worked hard to rein in spending. "Today's news is one of many examples of why we must continue to hold the line on spending, budget responsibly and reduce mandated spending," Hogan spokeswoman Hannah Marr said in a statement.

Comptroller Peter Franchot said the revenue estimates show that Maryland is making only a "tepid" recovery from the recession. He said only "modest tax relief for hard-working Marylanders" would be feasible.

For the current budget year of fiscal 2016, which runs through the end of June, the state expects to collect about $9 million more than previously estimated, with the extra money going to the state's surplus for next year.

The state expects to collect more corporate taxes due to a court settlement, more from the lottery due to record-setting Powerball drawings, more in inheritance taxes and less in sales taxes due to a lackluster holiday shopping season and less spending during snow storms, officials said.

For the next budget year of fiscal 2017, which starts July 1, the $60 million in lower revenue all comes from less sales tax as consumers remain wary about spending too much, officials said. Even with the decrease in sales tax, the total revenues increase by 3.5 percent from fiscal 2016 to fiscal 2017.

Brinkley, Franchot and Treasurer Nancy Kopp comprise the state's Board of Revenue Estimates and they unanimously voted to adopt the revised estimates during a brief meeting on Wednesday.

Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement
Advertisement