Comptroller Peter Franchot released end-year closeout figures for fiscal year 2013 which indicate Maryland brought in less General Fund revenue than projected for the year. From the Comptroller’s press release:
General Fund revenues totaled $14.9 billion in the fiscal year, 0.4 percent or $62.4 million below the official state forecast.
The revenue data reflected sustained weakness in wages, salaries and consumer spending. Withholding receipts fell $171.3 million short of the state’s modest estimates, increasing just 2.5 percent versus an estimate of 4.0 percent growth. Sales and use tax receipts increased by only 0.7 percent from the previous year, a level of growth that failed to keep pace with the rate of inflation for the same period.
Given the state’s questionable near-term economic outlook, the Comptroller urged the governor and General Assembly to proceed with caution and fiscal restraint.
The press release also notes factors that contributed to lower than anticipated revenues.
- Maryland’s high unemployment rate which, at 96% of the national unemployment rate, is the highest it has been relative to the US rate since the late 1990s;
- The ongoing consequences of sequestration on a state economy that remains heavily reliant upon federal jobs, spending and business opportunities;
- The effects of the retroactive state income tax increase that was enacted during the May 2012 special session of the Maryland General Assembly;
- The expiration of the federal payroll tax holiday, which increased the tax burden on the average Maryland worker by nearly $700 annually.
Although revenues are lower than anticipated, the closeout report indicates that the State closed out the year with a General Fund balance of $510.7 million; $263.7 million of which was assigned by the General Assembly to cover Fiscal 2014 operations.
Additional coverage can be found in the Baltimore Business Journal.