Income tax collected by the state is lower than estimated.
Some sobering statistics were released Wednesday by Maryland's Board of Revenue Estimates. The panel says income tax collections so far for fiscal year 2012 have not come in as projected. The amount of money taken in by the state was down by more than $80-million; and that's expected to drop in fiscal year 2013 by more than $50-million.
"This is not a doom and gloom, but a real cause for concern," says State Comptroller Peter Franchot. "Instead of going up by 7%, which we thought was going to be the case last September, they went down 7%."
The Board says revenue from individual income taxes dropped by more than $101-million. But corporate tax collections went up by more than $21-million.
Franchot is a member of the Board of Revenue Estimates.
T. Eloise Foster, Governor Martin O'Malley's Budget Secretary and a member of the board, says the revisions are relatively modest and manageable. She tells the Associated Press the budget has enough balance to absorb the reduction without impacting state services.
Franchot says this dip in revenue estimates means that the economic recovery has not completely taken hold. "The implication is that the recovery is fragile, and frustratingly slow," he says. While Maryland's unemployment rate is lower than other states, its residents are not making as much as they did in the past, and therefore pay lower taxes, says Franchot. "It calls into questions the gubernatorial and legislative strategy to raise taxes because obviously people are making less money," he says.
The Comptroller says lawmakers should put a time-out on any tax increases, and the state should try to better manage its money. "I'm not talking about draconian cuts or austerity programs for ideological reasons," he says. "I'm talking about real, common sense, down to earth fiscal oversight."
Through better management of taxpayer money, Franchot says the state can provide citizen services in a much more efficient way.
