A state fiscal panel approved reductions in projections of state revenue totaling nearly $270 million through the end of the coming fiscal year.
The reductions — nearly $138 million in the current fiscal year and $131.2 million in fiscal 2020 — are fully attributed to volatile personal income tax returns, according to Andrew Schaufele, director of the Maryland Board of Revenue Estimates.
“The revision is not driven by any change to our underlying economic fundamentals,” said Schaufele, noting employment and wages continue to be on track, though lower than previous economic expansions. “Driving this write-down is our familiar foe: income volatility, especially that from our wealthier taxpayers.”
The reductions approved Thursday by the three-member panel that includes Comptroller Peter Franchot, Treasurer Nancy Kopp and Budget Secretary David Brinkley represents roughly seven-tenths of a percent.
Still, the reductions caused Franchot and Brinkley to repeat their well-worn calls for fiscal restraint.
Franchot called on lawmakers to increase the state rainy day fund, citing concerns that a recession was nigh.
Similarly, Brinkley chided the leaders of the General Assembly — Democrats — for continuing to pass mandated spending that grows at 5 percent annually — a rate that outpaces the state’s 3 percent revenue growth. In years past, Gov. Larry Hogan has proposed measure to reduce mandated spending. None have made it out of committee.
“The legislature cannot keep passing mandates and expect there to be sufficient revenues to satisfy those commitments,” said Brinkley. “Should they continue to do so, they have an obligation to share with the taxpayers where the revenues would come from.”
Brinkley again expressed a desire to work with the legislature on the issue.
“Past responses to our mandate reform bills have left us concerned that such negotiations will never bear fruit,” said Brinkley.
The reductions were expected. Earlier, lawmakers said they expected a write-down of as much as $350 million over the same period. Legislators had already been considering contingencies to offset the projections within the budget even as they consider approving the first down payment on a multibillion-dollar increase in state education spending.