Increased Tax Collections Yield $295 Million Budget Surplus

Figures recently released by the Comptroller’s Office show that Maryland closed out fiscal year 2015 with a $295 million budget surplus. As reported by the Baltimore Sun,

Tax revenues jumped 5.1 percent in the past year, Comptroller Peter V. Franchot announced. The state closed out its fiscal 2015 budget with $15.9 billion in revenue, which was $214 million more than officials had forecast would come in. The biggest chunk of the increase came from higher personal income tax collections.

While officials may differ on whether this indicates an economic rebound, Governor Hogan and Comptroller Franchot did agree “it’s not time to loosen the reins on state spending.”

 Hogan said he thought the extra money should be used to “further stabilize the state’s finances, address our pension obligations or be put back into the pockets of taxpayers.” Franchot said he believed that the surplus “must be saved and not spent” in recognition of what he called the “uncertain fiscal and economic climate.”

During MACo’s Summer Conference, a panel discussion of state budget issues suggested this situation would likely arise. Warren Deschenaux, the General Assembly’s top fiscal advisor, predicted a substantial carryover as revenues exceeded projections. He also warned that much of the likely overattainment was attributable to capital gains and other income sources that are less dependable year to year than ordinary wage withholding. MACo’s Michael Sanderson, also on the panel, predicted a set of “competing ideas” for what such a fiscal posture might trigger among Annapolis decision-makers.

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