State budget surplus
ticks up to $351M
By Bryan P. Sears
Despite an end-of-the-year budget surplus,
the state’s top tax collector is urging Gov. Larry Hogan and the General Assembly
to take a parsimonious approach to the coming budget year.
Maryland raked in nearly $217 million more
in revenues in fiscal 2019, according to a report issued by Comptroller Peter Franchot.
The higher-than-expected revenues bring the
state’s unassigned surplus balance to $351 million.
Economic storm clouds, including a
historically long period of economic expansion, a trade war with China and
signs of a flagging stock market, call for caution, according to the comptroller.
"Given the indicators we’re seeing,
and the potential for disruptions to our economic and fiscal stability in the
near future, it would be in our best interest for the governor and the General
Assembly to exercise fiscal restraint and deposit this fund balance into our
Rainy Day Fund," said Franchot. "Policymakers should take a cautious
approach on new spending initiatives, no matter how well intended, that would
take more money out of the pockets of consumers who power Maryland's
economy."
One of the biggest costs is a potential $4
billion annual expansion of education to pay for the recommendations of the
Kirwan Commission. Some lawmakers say new revenues — either a new tax or
expansion of an existing one — could be necessary to pay for the program.
The additional revenue was attributed to
strong capital gains as well as a Supreme Court decision that opened the door
to state’s collecting sales tax on online sales.
"While revenues have again exceeded
our modest estimates, this year's figures belie several troubling indicators
that increase the possibility of an economic contraction," said Franchot.
"Unpredictable swings in trade policy and the ballooning federal deficit,
coupled with an unprecedented 121 consecutive months of economic expansion and
negative market indicators like the inverted yield curve, all suggest national
economic volatility."
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