Comptroller
Franchot's Statement on New Revenue Estimates
ANNAPOLIS, Md. (December 13, 2017) - The
Board of Revenue Estimates voted today to reduce by $73.2 million the revenue projection
for the State of Maryland for Fiscal Year 2018 and to increase by $11 million the estimate
for fiscal year 2019. That establishes a $17.6 billion revenue estimate for the
next fiscal year, which begins in June 2018.
The Board's actions are
largely driven by continued weaker-than-anticipated sales
tax revenues as consumers remain reluctant or unable to spend. Additionally,
non-nexus online shopping continues to cut into tax revenues and hinders the
growth of brick-and-mortar Maryland retailers.
The negotiations over tax bills in Washington continue to be monitored; once final action
is adopted, the impact on Maryland revenues will be added into future revenue estimates.
Following are Comptroller Franchot's remarks, as prepared
for delivery:
"I know a lot of Marylanders and my colleagues at the
state and local levels are wondering how Maryland will be impacted by the
federal tax reform legislation being considered by Congress.
And like each of you, it is my hope that common sense will
prevail and that our lawmakers will think long and hard before enacting
provisions that will have dramatic effects on middle-class families and state
revenues.
The revenue projections that have been brought to this
Board for approval were meticulously and carefully crafted based on what we
know ... and the trends we are seeing ... and the data we are receiving. Once
Congress approves a final version of the tax reform legislation, our experts
here will work diligently to determine its impact on Marylanders' income and
our state's fiscal future and propose revisions to our revenue estimates where
appropriate.
In other words, we're doing the best we can with the
information we have. But, here's what we do know and here’s what the numbers
tell us. While we have undoubtedly made considerable progress after the
crippling effects of the 2008 Recession, with an unemployment rate hovering
around 4 percent and stock market trends that are headed in the right
direction, the fact of the matter is that thousands of Maryland working
families and small business owners who were affected the most by the economic
crash nearly a decade ago haven't fully recovered.
We continue to see that with declining sales and use tax
revenue. With wages and salaries that are lackluster at best. Even those who
are employed with good-paying jobs have – in more cases than not – elected to
put their disposable incomes in their piggy banks instead of putting money back
in our local economy. And who can blame them?
With all the uncertainty that's being produced by
Washington at an almost daily basis, coupled with the continued fiscal and
economic challenges that our state and our communities face. It's
understandable why so many of our citizens remain hesitant and timid about how
they spend their hard-earned incomes.
Given the challenges that our working families and small
business owners face and the potential impact that will emerge from federal tax
reform legislation, it is my hope that the General Assembly will continue to
exercise fiscal restraint as they consider legislation that will impact the
fiscal health of our state and our citizens.
I renew my call for a moratorium on new taxes and fees,
because the last thing Maryland families and businesses need are further
disruptions to their budgets in a time when some of our friends and neighbors
are struggling to make ends' meet and pay the bills.
At the state level, we have to be careful and smart on how
we spend the taxpayers' dime and simply forego the things that we want… in
order for to pay for the things that we need. And I hope that the General
Assembly will once again consider legislation that will require online
retailers to collect and remit sales and use taxes.
And I want to emphasize that this is not a new tax
... or a new fee ... this is simply leveling the playing field for
our small businesses that diligently comply with our sales and use tax laws
against online retailers who have gotten away with not doing so because of
legislative inaction. Because at the end of the day, government should not be
picking winners and losers – and when we force small businesses to compete with
online retail giants that offer convenience, lower prices, and don’t collect
and remit sales tax we are putting our brick-and-mortar stores and main street
retailers at a tremendous disadvantage.
I was proud to testify in support of the Main Street
Fairness Act that Senator Madaleno and Delegate Hixson introduced last session,
and I do hope that legislators can work in a bipartisan fashion to advance this
legislation in the 2018 General Assembly session.
So, let me close by urging those of you who have not yet
completed your holiday shopping to go out and support our small businesses and
local retail stores that not only offer great and quality products, but serve
as the bedrock of our communities and our state economy."
View the data here.
MEDIA CONTACTS: Joe Shapiro: jshapiro@comp.state.md.us
410-260-7305
(office); 443-871-2244 (mobile)
Alan Brody: abrody@comp.state.md.us
410-260-6346 (office); 443-924-1473 (mobile)
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