In his role as chairman of the Maryland Board of Revenue Estimates, State Comptroller Peter V.R. Franchot (D), Maryland’s comptroller, made news last week when he projected a robust $430 million in additional revenues for fiscal year 2019.
How did the board come to that estimate?
Addressing a meeting of the Small Business Network of Montgomery County the other day, Franchot explained the process for calculating these estimates: by viewing 2.5 million tax returns from 2014 and looking at them with a simulation of the new federal tax cut included. He said the large amount surprised him because 71 percent of Marylanders will benefit directly from the federal tax cut.
The Board of Revenue Estimates also projected a $39 million decrease in the state’s fiscal year 2018 revenues. The fiscal year ends on June 30.
Franchot said he is urging Gov. Lawrence J. Hogan Jr. (R) and the Democratic-led legislature not to get too excited about spending it all. He cautioned that it’s difficult to predict how the economy is going to adjust to the new federal tax cuts and the state’s leaders need to remember the ongoing volatility in both the national business and political environments.
“Like everyone, I hope the end result of the tax cuts is positive, but we have to prepare for the inevitable recession,” he said. “So just as I urge the state not to spend the extra money they receive, I hope businesses will also be careful in how they handle the extra revenue.”
Click here to read the rest of the article written by Marie Robey Wood over at Maryland Matters