Md. revenue estimates decreased for FY 2023, FY 2024
MARYLAND – Maryland’s revenue estimates for Fiscal Years 2023 (FY23) and 2024 (FY24) have been reduced.
“On Thursday, we met and the Board decided that we needed to revise the revenue estimates that we had from last year to reduce them,” said Comptroller Brooke Lierman. “We decreased our revenue projection by 0.3% for Fiscal Year 2023, and 1.6% for Fiscal Year 2024. That ends up being about a $478 million decrease to our total revenue projections for FY23 and FY24.”
Factors Driving Write-Downs
Lierman says the decreased rate of growth and revenue comes after federal COVID-19 stimulus money dried up. “Federal stimulus spending was flowing into every state, including the state of Maryland. We saw huge bumps in one-time dollars,” she said.
Now, the state’s top tax woman and her team are navigating where Maryland’s economy might turn next, amid uncertain financial times.
“We don’t know exactly where we will land yet because of the high inflation rates that we’re seeing right now,” said Lierman. “So, we are trying to estimate what the new walking speed – what the new normal – is for the state of Maryland, and for our economy.”
Lierman says there are other weaknesses within Maryland’s economy that helped drive down the estimates.
“We saw underperformance in employment and in consumer spending. We have an aging workforce compared to the national workforce. So, we have to be mindful of some of these challenges, and make sure that we’re meeting them head-on,” said Lierman.
Addressing Existing Challenges
Even though the state won’t be pulling in as much money as expected, Lierman says Marylanders shouldn’t take the numbers as a red flag; rather, more of a “flashing yellow light.” In the coming months, Lierman says her team will also be taking a deeper dive into identifying other challenges.
“We’ll be out meeting with leaders, working on the numbers, really understanding better what’s driving the slow down, and what we think our new walking speed for Maryland will actually be,” said Lierman. “When we know what’s driving some of these challenges, then we can dig into them a little bit more, and we can offer our perspective to the General Assembly, and the Governor, so they can decide what policies we need to put in place, to ensure that we’re supporting our economy, and that it’s growing at the speed at which it needs to.”
Republicans Respond
Thursday, Maryland’s House Republican Caucus responded to the write-downs. In a statement, the caucus said the new numbers were “very concerning, albeit not surprising given the volatility of the economy under President [Joe] Biden.”
The caucus also stated that it hopes the Maryland General Assembly will take its new budgeting powers seriously, and tamp down spending. “Past is often prologue, and we have seen this movie before,” reads the statement. “a new Democratic Governor spends through surpluses just as the economy tanks, leading to nearly a decade of tax and fee increases.”
Before Thursday’s announcement, the caucus said its non-partisan fiscal analysts were already projecting budget deficits “due to Democratic spending choices that are unsustainable.” The caucus said it has “a moral responsibility to ensure we are not setting up our citizens for significant tax increases at a time when they can least afford them.”
Looking Ahead
However, Lierman also cautions against spending too much, too soon.
“We don’t know yet where our economy is going. So, we have to be really thoughtful about the approaches we are taking to grow the economy,” said Lierman. “As we think about how our economy is doing, then we can be competitive with our neighboring states, and that we can make sure our economy is growing in a way that allows everybody to benefit.”
