Revenues, Taxes, and Wynne — Updates from State’s Chief Economist

Andrew Schaufele, Director of the Bureau of Revenue Estimates, briefed MACo’s Legislative Committee Wednesday, September 12, 2018 on the state of the State’s economy. 

Andy
Director of the Bureau of Revenue Estimates, Andrew Schaufele

Schaufele delivered good news regarding the state’s revenues — there’s a $504 million surplus! This was 2% more than estimated, much of which has been attributed to capital gains. Of that surplus $200 million has been set aside to help fund changes anticipated to occur as a result of the Kirwan Commission. The state also beat sales tax estimates.

Schaufele also provided updates on:

  • The Wynne Case. Challenges are ongoing with three separate cases in the courts. As was reported on Conduit Street, the Office of the Attorney General has formally requested the Circuit Court of Anne Arundel County to review the Maryland Tax Court’s ruling which essentially raises the Wynne Case refund interest rate from three to 13 percent – a decision which would likely cost Maryland counties $30 to $40 million. County attorneys have been engaged on this issue filing amicus briefs and working with the Attorney General’s office.
  • Federal Tax Reform. Tax payer reactions to federal tax reforms add a level of uncertainty to estimates. However early data shows that shifts in tax payments and deductions have impacted the flow of money into the state and counties to the tune of tens of millions of dollars in the immediate years to forecasts of hundreds of millions of dollars in future years.

Members of the MACo Legislative Committee include representatives from Maryland’s 23 counties and Baltimore City. The committee meets regularly on Wednesdays at the MACo office during the general assembly session. During the interim, the committee meets quarterly to develop legislative priorities for the coming year.

For more information:

MD AG Seeks Judicial Review of Wynne Whammy (Conduit Street)

Court Strikes Wynne Interest Rate, Costing Counties $30 Million (Conduit Street)

First Quarter Income Tax Distributions: Tax Reform Impacts Materialize (Conduit Street)

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