September 2, 2010
An article by MarylandReporter writer Megan Poinski, shares the good news that was discussed at the September 1 Board of Public Works meeting; the State has a Fiscal 2010 General Fund balance of $344 million. That’s over $180 million more than anticipated. However, revenues are still down.
In 2010, Maryland collected 3.7% less than it did in 2009 – and $1.1 billion less than in 2008. Revenues are still down for county governments as well. In the August income tax distribution to counties released by the comptroller this week, most counties received less money last month than in August 2009 based on projected tax collections.
By law, the fund balance goes into the State’s Rainy Day Fund.
More coverage can be found in the Baltimore Sun, Baltimore Business Journal, and Daily Record.
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Posted by Andrea Mansfield
August 30, 2010
Today, the Office of the Comptroller released its detail of the August distribution of county income taxes. According to the electronic message:
The August local income tax distribution totals $49.4 million, a 34.6% decline from last year’s distribution; all but three counties saw a decrease. This distribution includes two reconciling payments:
- the second quarter balance distribution, which is based on actual withholding and estimated taxes attributable to the second quarter of 2010, less amounts already distributed
- the final distribution for tax year 2009, which is volatile since it only accounts for returns processed over a three-week period, from June 8 through the end of the fiscal year (June 30)
Second quarter withholding receipts totaled just under $2.5 billion, an increase of 3.2%, as the Maryland unemployment rate stabilized. However, actual estimated payments dropped 7.9% to $346.1 million. After accounting for the $739.5 million distributed in May and June and the municipal share, the balance due of $40.5 million represents a decline of 43.9% from last year. The decline indicates that because the April, May and June withholding and estimated payments projection was closer to actual receipts this year than in previous years, most counties received their share of revenue earlier in calendar year 2010 than they did in calendar year 2009. The total second quarter distribution is $768.9 million, a decrease of 4.4% over 2009.
Finally, four counties saw an increase in local tax liability between tax years 2008 and 2009, led by St. Mary’s and Prince Georges counties. However, the increase in Prince Georges was mainly due to a rate increase from 3.1% to 3.2%.
If you have questions regarding the August distribution, please contact George Freyman of the Revenue Administration Division, at 410-260-7455.
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Posted by Andrea Mansfield
July 28, 2010
As reported by Megan Poinski for MarylandReporter, a new national report by the National Conference of State Legislators finds that Maryland’s revenues are ahead of projections for fiscal 2010 and that Maryland is one of the “more promising examples of economic recovery.” However, she also reports that Maryland is still facing a budget gap due to federal stimulus funds running out.
Maryland’s revenues are running ahead of projections across the board for fiscal 2010, according to a report released this week by the National Conference of State Legislatures, looking at the budgets in all 50 states. Revenues from personal income tax, corporate income tax, and sales tax are all more than were estimated back when the 2010 budget was drawn up and debated, and the report touts this as a piece of good news.
The good news, however, is misleading. Warren Deschenaux, director of the Legislature’s Office of Policy Analysis, said that back when the FY 2010 budget was being considered, a 5% across-the-board decrease in revenues was projected.
“It looks like we only declined about 3%, so we’re ahead of the estimate,” Deschenaux said. “If you look at the year as a whole, we are still taking in less than the year before.”
The report also takes a look at each state’s projected budget gaps for the next several fiscal years. According to the report, Maryland is expected to have a $2.4 billion budget gap for fiscal 2011, which just started, $1.8 billion in 2012 and $1.6 billion in 2013. Deschenaux said most of the gap will be the result of federal stimulus funds running out.
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Posted by Andrea Mansfield
June 30, 2010
Today, the Office of the Comptroller released its detail of the June distributions of county income taxes. According to the electronic message, “The June distribution totals $707.5 million, an increase of 4.5% over last year’s distribution.” It has three separate income tax components:
The final distribution also includes the final installments of the disparity grant for fiscal year 2010, which is up 5.1%.
This distribution represents the first reconciling distribution for tax year 2009 returns, reflecting returns processed and posted to the tax system by early June. At $18.3 million, this distribution is 69.9% above that of last June, despite a 2% overall reduction in the number of returns received as of the same date last year. In addition, this distribution reflects a reduction of approximately $3.6 million for administrative costs related to the implementation of MITS. To date, the MITS project has resulted in approximately $55.9 million in additional collections for FY 2009 and FY 2010 that may not have otherwise occurred.
Reconciling distributions can be volatile, as they depend on the prior tax year’s pattern of collections, the current tax year’s distributions, and returns for the current year received by the cutoff date. A modest recovery in 2009 resulted in a significant increase in the distribution compared to 2008.
If you have questions regarding the June 29 distribution, please contact George Freyman of the Revenue Administration Division, at 410-260-7455.
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Posted by Andrea Mansfield
June 11, 2010
As reported in the Baltimore Sun, the Taxation and Finance Committee of the Baltimore City Council approved $15 million in new taxes during its meeting yesterday. This action and other tax increases already approved (see previous blog) will help the City close a $121 million budget deficit.
The committee voted to increase hotel room taxes, parking rates, an excise tax on billboards and the energy tax for residents, nonprofits and nonindustrial businesses.
The committee delayed action on a proposal to apply the city’s energy tax to industrial businesses, over what its chairwoman, Councilwoman Helen Holton, described as “a technical issue.”
Holton said the proposal to apply the energy tax to industrial businesses, which has drawn opposition from local manufacturers, is still alive and will be presented in the coming days.
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Posted by Andrea Mansfield
June 11, 2010
As reported by the Gazette, most counties will not increase taxes to balance their fiscal 2011 budgets. However, a local economist has a different prediction for fiscal 2012.
That trend is not likely to continue into fiscal 2012, said Anirban Basu, chairman and CEO of the Baltimore-based Sage Policy Group. Basu is basing his prediction on a still-weak economy and a fragile housing market he says will hurt state and local budgets. The state, in turn, will make cuts to funding for local government, he said, forcing counties to find additional sources of revenue.
The article reports -
Already, Anne Arundel and Kent counties have raised property taxes slightly, and the Baltimore City Council voted Monday to increase taxes on income, telecommunications and parking to raise $20 million.
In Montgomery County, council members approved steep increases to energy and cell phone taxes to generate about $150 million in new revenue. The council also approved a fee on ambulance rides to be paid by insurance companies; it is expected to bring in about $13 million annually.
Officials in Prince George’s, Queen Anne’s, Frederick and Washington counties say they have not had to turn to tax increases — yet.
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Posted by Andrea Mansfield
June 8, 2010
According to the MarylandReporter.com blog, while speaking before the Maryland Economic Development Association, economist Anirban Basu predicts that taxes will increase next year, while aid to counties will continue to decline.
Basu, one of the most widely-quoted economic experts in the state, said in his annual review of economic conditions that “aid to local government will be slashed at every level” and “taxes are going higher,” particularly local property taxes to make up for the loss in state funding.
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Posted by Andrea Mansfield
April 28, 2010
On April 15th NACo President-elect Glen Whitley testified before the House Judiciary Subcommittee on Commercial and Administrative Law, which is exploring the impact federal legislation has on local government budgets and revenues. Representing the nation’s counties, Whitley emphasized that federal legislation with tax and revenue components could potentially have large financial implications on local governments. He stated:
“…while federal legislation can have a positive impact on local government revenue streams, it can also cause just the opposite. Unlike the federal government, local governments must balance their budgets, which is not an easy thing to do in today’s financial climate.”
NACo strongly urges the 111th Congress to strongly consider the impact legislation could have on current and future local government budgets.
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Posted by Emily Hollis
April 22, 2010
Maryland’s state property tax rate will remain at 11.2 cents per $100 of assessed value for 2011. This rate, which has been in place since 2006, was approved by the Board of Public Works yesterday based on a recommendation from the Commission on State Debt.
It won’t cost the state’s general fund anything this year to keep the rate intact, but the commission warned that it will become increasingly costly to maintain the rate in future years if property values don’t go up.
Revenue from the State property tax is used to pay off State bonds issued for capital projects such as roads and schools.
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Posted by Andrea Mansfield
April 1, 2010
As introduced, SB 922 would have extended the Homestead Property Tax Credit (credit) in all local jurisdictions to apply to units of independent living retirement communities. MACo opposed the original bill, objecting to the breadth of new application for this homeowner-only tax credit, and noting that the benefit would not necessarily inure to the occupant, but instead to the commercial enterprise operating the facility.
As amended in the Senate, the bill has been amended to have only local effect, and would give Carroll County the option of authorizing the credit.
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Posted by Andrea Mansfield
