The Maryland Board of Revenue Estimates voted today to increase state revenue projections for fiscal 2024 to $24.64 billion, a slight uptick of $78.2 million from the forecast approved in September. The Board also lowered revenue projections for fiscal 2025 to $24.92 billion, a decrease of $162.6 million from the September forecast.
The three-member panel, which includes Comptroller Brooke Lierman, State Treasurer Dereck Davis, and Secretary of Budget and Management Helene Grady, is responsible for estimating state revenues to assist with managing the State’s budget. The forecasts for the current fiscal year and the one that begins in July 2024 will provide budget writers and policymakers with the latest revenue projections and economic trends.
While the December forecast is largely unchanged from September, the Maryland economy appears to be underperforming compared to the national economy in consumer spending, and sales tax gross receipts have not kept up with higher inflation. Spending on home improvement, electronics, and other related goods that were high during the pandemic is now weak. In addition, lottery sales and casino revenues are down.
Fiscal 2024 personal income tax revenues, including withholding, align with the September Forecast. Nonwage income, including capital gains, is also unchanged from September.
Almost 1 out of every 5 dollars in the State’s general fund comes from nonwage income, which has proven to be a volatile revenue stream. However, an economic downturn could cause these revenue streams to decrease as interest rates climb and the stock market wobbles.
As previously reported on Conduit Street, with the 2024 legislative session rapidly approaching, lawmakers will face considerable budget challenges that could drive spending cuts, tax increases, or other remedies to resolve significant structural deficits projected through fiscal 2029.
Useful Links
Board of Revenue Estimates Meeting Video