A copy of the estimated Maryland revenue report sits atop a table Dec. 16, 2008, before the start of a Board of Revenue Estimates meeting in Annapolis.
A copy of the estimated Maryland revenue report sits atop a table Dec. 16, 2008, before the start of a Board of Revenue Estimates meeting in Annapolis. (Glenn Fawcett / The Baltimore Sun)

Maryland’s government will receive hundreds of millions less in revenue than officials previously expected, members of a state fiscal panel said Thursday.

The three-member Board of Revenue Estimates reported that the state now expects about $138 million less than anticipated for the fiscal year 2019 budget and about $269 million less over the next two years.

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In response, Democratic Comptroller Peter Franchot, a member of the board, called on Maryland lawmakers to “exercise caution with respect to spending.”

In December, the board had estimated $18.070 billion in general fund revenues for fiscal year 2019 and $18.622 billion for fiscal year 2020.

The latest numbers came as Democratic legislators combed through Republican Gov. Larry Hogan’s budget, looking for cuts and trying to free money for a new $1 billion proposal to boost funding over the next two years to pay for the recommendations of a commission studying how best to improve Maryland’s public schools.

Maryland fiscal board reports $1 billion in unspent revenue, but warns of possible recession

Maryland’s government is entering a new year with more than $1 billion in unspent revenues, but could be bracing for a potential economic recession, members of a state fiscal panel say. The $1 billion in unspent revenues are due, in part, to a $500 million surplus from last fiscal year.

Anticipating the drop in revenue, leading Democrats wrote late last month to Hogan’s budget secretary, David Brinkley, asking him to suggest cuts in the governor’s current $46.6 billion spending plan.

Sen. Nancy King, a Montgomery County Democrat who is chairwoman of the Budget and Taxation Committee, and Del. Maggie McIntosh, a Baltimore Democrat who is chairwoman of the Appropriations Committee, blamed the lower revenue on “the federal government shutdown and much lower than expected estimated income tax payments.”

King and McIntosh asked Brinkley to submit a revised budget with less spending and warned that they will otherwise have to make “significantly more cuts” to the governor’s current spending plan.

In Annapolis, Kirwan commission head sounds alarm about need to increase Maryland public school funding

Former University System of Maryland Chancellor William “Brit” Kirwan joined Democratic leaders in Annapolis to rally support for legislation that would provide more than $1 billion over the next two years to begin implementing his education commission’s recommendations.

Brinkley wrote back that the Hogan administration “does not believe it is appropriate to interject itself in the middle of the General Assembly’s constitutionally required review of the executive budget.”

Brinkley suggested the Democratic lawmakers, instead, conduct a review of all the mandated spending their party has written into law. Hogan’s office says about 80 percent of the spending in the governor’s budget is mandated by the legislature.

In announcing the legislation this week to increase education funding by $1 billion over two years, House of Delegates Speaker Michael Busch said lawmakers will ensure the education programs get funded, regardless of whether less revenue is coming in.

“We’re having a write-down in our budget. People said, ‘You have to back off education.’ We said, ‘No,’ ” Busch said. “We have to make tough decisions. There are going to be some other programs that are going to be cut. No doubt about it.”

In announcing the updated revenue numbers, Board of Revenue Estimates Executive Secretary Andrew Schaufele also warned that the state should prepare for a possible recession.

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