The Board of Revenue Estimates voted today to slightly decrease the revenue projections for fiscal 2021 to $18.8 billion, representing a $779,000 decrease from the December estimates. Additionally, the Board revised the projection for fiscal 2022 to $20.1 billion, representing a 1.5 percent increase, or $299 million change, from the previous estimates.
Because these estimates include the fiscal impact of this year’s emergency legislation and veto overrides, today’s revenue estimates actually represent a 2.3 percent increase for fiscal 2021 and a 2.4 percent increase for fiscal 2022, or $424.0 million and $473.3 million, respectively. The uptick is largely attributable to an influx of federal stimulus funds, as well as the expectation that Congress this week will give final approval to President Biden’s $1.9 trillion American Rescue Plan.
The three-member panel — which includes Comptroller Peter Franchot, State Treasurer Nancy Kopp, and Secretary of Budget and Management David Brinkley — is responsible for estimating state revenues to assist with managing the State’s budget.
According to a statement from Comptroller Peter Franchot:
“These are tremendous numbers, spurred by the record amounts of federal stimulus from December and what we expect Congress to pass this week or the next. While this is overall good news, we must not let today’s report lull us into thinking that Maryland’s economy is close to full recovery.
“As noted in this report, today’s numbers have been adjusted to include several factors that have occurred in the last few months. A second federal stimulus passed in December provided this state with another cash infusion to help many Marylanders and the possibility a third federal stimulus could bring additional funds to our state.
This report may allow us to be more confident about Maryland’s overall fiscal picture for the next two years, but there is still much uncertainty in the future. The pandemic has taught us that months and even years of planning and projections can change in an instant.
It would remain very wise for all of us to not assume that our current road to recovery automatically leads to one of guaranteed and sustained prosperity. We must be smart with our money and prepare for economic gravity to kick in at some point. I’ve said this in the past and I’ll say it again: What goes up … must come down.
Stay tuned to Conduit Street for more information.