ANNAPOLIS — Maryland’s revenues fell short of projections by an additional $270 million for the current and fiscal 2016 budget years.
The shortfall is part of a report presented to the Board of Revenue Estimates Monday afternoon.
“It is yet another reminder that we haven’t turned the corner from the worst economic downturn in our lifetimes and that we continue to experience one of the slowest, most anemic economic recoveries any of us has ever seen,” said Comptroller Peter V.R. Franchot, one of the members of the board.
The board was told that revenue for the current year fell short of projections by an additional $123 million.
The write-down is on top of a $405 million write down the board announced in September.
“The bottom line is: Without an unforeseen economic shock, either positive or negative, we see slow economic growth on the horizon,” said Andrew M. Schaufele, director of the Board of Revenue Estimates.
The revisions were driven by projected decreases of nearly $266 million in state personal and corporate income taxes, as well as decreases in state lottery revenue, revenue from tobacco taxes and taxes on insurance companies.
But Maryland is projected to collect higher than estimated sales and use tax revenue, including $15.1 million this year and another $5.2 million next year.
Included in those estimates are changes related to the new Amazon distribution center in Baltimore and decreases in the cost of gas that are putting more money in the pockets of consumers.
Schaufele said it was unclear if the increases are driven by pent-up demand driven by not making purchases over the last seven years or if it was evidence that consumers are more confident about their own employment situations.
The news bore out concerns expressed earlier in the day by Sen. Roger Manno, D-Montgomery County and the newly appointed Senate chairman of the Spending Affordability Committee.
“It’s not surprising, we’ve had overstated revenue estimates just about every year I’ve been in the legislature,” Manno said. “It’s sobering that our revenues are not coming in as projected. We have to take note of the fact that this is not an unusual occurrence and we sort of learn to live in that world where revenues are not coming in as projected.”
Currently, Maryland legislators and the incoming governor face a nearly $300 million budget deficit in fiscal 2015 and another $600 million projected for fiscal 2016.
Earlier this month, officials with the University System of Maryland confirmed that most state universities implemented hiring and spending freezes in anticipation of budget concerns. A spokeswoman for the governor’s office said similar actions were underway within state agencies.
The reductions would likely have an effect on the current budget year and the budget for incoming Republican Gov. Larry Hogan.
“It will have an adverse affect on the budget,” said state Budget Secretary T. Eloise Foster.
Foster called the adjustments “disappointing” but said there was room for optimism.
“I think, though, that we need to recognize and acknowledge the fact that our economy continues to grow,” Foster said. “We’re growing, but obviously we’re growing at a far slower rate than we had anticipated, than we had projected, or that we would like.”
This is the second time since the fiscal year began in July that the state has revised its revenue estimates down. Just two days into the budget year, Gov. Martin J. O’Malley and the Board of Public Works, approved more than $84 million in combined budget cuts, job eliminations and fund transfers in anticipation of downward trending revenues.
Two months later, those fears were confirmed with the Board of Revenue Estimates revised the state’s revenue estimates downward by about $405 million for fiscal years 2015 and 2016.