Comptroller releases annual MD revenue report
Maryland pulled in less revenue than almost any time in four decades -- but outperformed its bleak financial forecast, state Comptroller Peter Franchot reported this morning.
The state's revenue collections, which include sales and property taxes and various fees, amounted to $12.6 billion in the fiscal year that ended June 30, representing a year-over-year decline of 3.7 percent, Franchot said.
But because financial analysts had predicted an even more dramatic decline, the state actually ended the year with $183.7 million more than projected. The state ended the year with a fund balance of $344 million (the unexpected money plus planned transfers), which, by law, goes into the state's rainy day fund.
Franchot summarized the report this morning at the Board of Public Works, a three-member panel of Democrats that also includes Gov. Martin O'Malley and Treasurer Nancy Kopp.
It was a striking contrast from last year, when lower-than-anticipated revenues prompted the board to slash spending to bring the state budget into balance.
Still, Franchot maintained a gloomy tone, saying only that the state had "outperformed its catastrophic projections."
"That's great," O'Malley said.
"It's not just great, it's a great sense of relief," Franchot said. He went on to say that the national recession has taken its toll on Maryland, even though it is doing better than other states.
To get back to where state revenue stood before the recession, Maryland would have to see 14 percent growth each year for the next four years. State revenue is projected to grow by 3.6 percent this year.
"Anyone who thinks we can grow our way out of this is mistaken," Franchot said. "We simply have to face reality."
He said the state would need to continue its belt-tightening in "this new age of austerity."
O'Malley focused on the positive signs, pointing to five months of job growth, lower unemployment claims in recent months and Forbes Magazine's prediction that Maryland would be one of just three states to see revenue growth this year.
"We'll just have to keep up the cutting and the tough choices that we've shown ourselves capable of," the governor said.