Just as the Senate Budget and Taxation Committee prepares to issue its fiscal plan for the 2017 budget (and related issues), the state’s Board of Revenue Estimates has released an official write-down of its FY 2017 revenue projections. The $60 million reduction is not jarring enough to dramatically alter the year’s balance or to cause a new round of reductions or changes to the budget, but may create some caution in ongoing deliberations of longer term fiscal matters.
The state Board of Revenue Estimates cut its projections for the state’s fiscal year 2017 collections to $17.02 billion. The entire $60.6 million decrease was due to a significant cut in expected sales and use tax collection growth.
Sales taxes are unlikely to grow as fast as previously anticipated, Comptroller Peter Franchot said in a statement. Lackluster wage growth and a stagnant economy are affecting consumer spending and, by extension, tax collections, he said.
“This reduction in estimates reflects very weak sales during the holiday shopping season and the month of January and translates to reduced revenue for the state,” Franchot said. “What’s happening in Maryland mirrors what’s happening in the nation as a whole. Consumers hope the economy is improving but they’re being cautious.”