Unprecedented growth in income and sales tax revenues fueled by federal aid continues to drive up projections.
The Maryland Board of Revenue Estimates voted today to once again increase the revenue projections for fiscal 2022 to $21.6 billion, representing a $495 million increase from the September estimates.
Additionally, the Board, which consists of Comptroller Peter Franchot, Treasurer Nancy Kopp, and Budget Secretary David Brinkley, adjusted the official revenue forecast for fiscal 2023 upwards by $543 million to $22.8 billion.
All told, state budget writers and policymakers have roughly $6 billion in unanticipated revenue as they construct the fiscal 2023 state budget.
The bulk of the increase is attributable to income tax collections from tax year 2020, higher sales tax receipts, and growth in tobacco tax revenues.
This latest revision follows the Board’s actions in September, writing up fiscal 2022 revenues by $995 million and predicting an additional $1.37 billion in revenues for fiscal 2023. That came days after Maryland closed the books on fiscal 2021 with a $2.5 billion general fund balance.
According to a press release from the Maryland Comptroller:
Maryland is still feeling the positive effects of federal relief aid flowing into and through the economy, explained Andrew Schaufele, the Board’s executive secretary. While he said this economic growth is relatively sustainable, there are likely to be some future hiccups with course corrections to capital gains and business income and likely stock market declines at some point in the future.
Today’s BRE meeting was the last for Treasurer Kopp, who is retiring after nearly 20 years in the position. It also marked the last meeting for Mr. Schaufele, who will become Deputy Comptroller in January following the departure of Sharonne Bonardi.
“Today’s report allows us to be confident about Maryland’s overall fiscal picture for next two years, but we should still exercise caution,” said Maryland Comptroller Peter Franchot. “The pandemic and everything that it has brought with it has shown us that even smart planning and projections can change in an instant. Our state’s greatest strength is its people, and I believe we should invest in them, and take precautions to ensure we can continue to invest in them even when we hit hard times.”
Stay tuned to Conduit Street for more information.