State Comptroller recommends additional cash be put into 'Rainy Day Fund.'
Maryland did very well financially during fiscal year 2012. The Comptroller's Office says the state collected $14.3-billion in general fund revenues in FY '12, which ended on June 30th, 2012. That's nearly $230-million more than the official estimate, or a 1.6% increase.
Comptroller Peter Franchot calls this "good news." "But I'm urging the governor and the legislators to take that $230-billion and put it in a reserve fund for savings," he says.
Franchot says the state is coming out of the recession, but it's a weak recovery "We're not out of the woods on that. So we have to be careful and very pragmatic in how we use that money. It's one-time money," the Comptroller says."
In a statement, Franchot says that cash may be needed in case of another downturn.
"We have a 'Rainy Day Fund' with $600-million or $700-million in it, but we need to put this $230-million in it. And we need to really focus on our spending," says Franchot. "If we do that, and get fiscal discipline and get our spending under control, then down the road we can allocate that $230-million."
Maryland has been criticized as spending more money than it takes in, which is called a structural deficit.
Right now, the Comptroller says in a statement, Maryland's unemployment rate crept up to 7% during the early months of fiscal year 2013, which began on July 1st. He also says the state lags behind its neighbors when it comes to job creation, and it ranked 47th in weekly earning growth, and 43rd in hourly earning growth. Because Maryland depends very heavily on federal spending, Franchot says it must be aware of any federal cutbacks and what effect it will have on the state.
"Let's be very cautious and pragmatic, and really focus on getting our fiscal house in order," he says. "If we do that, we'll be just fine in Maryland."
The Comptroller's Office also says sales tax receipts went up by 2.7% in fiscal year 2012, and withholding receipts grew by 3.6%.