The Board of Revenue Estimates, composed of Comptroller Peter Franchot, State Treasurer Nancy Kopp, and Secretary of Budget and Management T. Eloise Foster, announced today that the State has closed fiscal 2012 with $229 million more in revenue than previously anticipated. This additional revenue is the result of increases in the State’s share of the personal income tax, corporate income tax, sales tax, and lottery sales.
However, the State is still facing a structural deficit that must be closed in the fiscal 2014 budget. From the Baltimore Sun:
The extra $225 million on the books for last year means the state ended up with an unappropriated fund balance of $545 million on top of the money in the Rainy Day Fund.
That balance is roughly the same size as the long-term revenue shortfall — known as the “structural deficit” — that has bedeviled Maryland budget-makers for several years. That deficit had grown to about $2 billion in the depths of the recession, but the administration and lawmakers have been reducing it in recent years through a combination of budget reductions and tax increases.
The General Assembly’s Spending Affordability Committee has set a goal of eliminating that structural shortfall entirely in the budget it will vote on next year. According to the new budget figures, the gap could be as little as $50 million — a relatively tiny amount in an overall state budget of more than $36 billion.
While the additional revenue is good news, it is being advised that the State proceed cautiously. Senator Ed DeGrange, who co-chairs the Spending Affordability Committee, said that “we should still be on the conservative side” and Comptroller Franchot urged that this fund balance be placed in the State’s Rainy Day Fund.