From the Office of the Comptroller of Maryland:
Statement of Comptroller Peter Franchot Regarding Updated Revenue Estimates
Annapolis, Md. (September 24, 2014) – The Board of Revenue Estimates met today to write down revenue estimates for Fiscal Years 2015 and 2016 by more than $405 million. Comptroller Peter Franchot, as chairman of the Board, released the following statement:
“We convene today to write down our already cautious revenue projections for Fiscal Years 2015 and 2016 by more than $405 million. Far more important than what a $405 million shortfall means for the state budget is the painful reality that it indicates for the budgets of Maryland families and small businesses.
“We’re writing down individual income tax receipts – the largest individual source of state revenue – by over $350 million, between the shortfall in individual income tax receipts carried over from Fiscal 2014 and our write down of expected revenues for Fiscal Year 2015. Six years removed from the economic collapse, and far too many families and small businesses are still waiting for the recovery they keep hearing about.
“We can classify a year or two outside the ordinary as simply abnormal. But more than a half decade later, we need to accept that sluggish growth and challenging economic conditions have become our new normal. It feels like we sit at these meetings every quarter, hopeful and determined that ‘next year will be the year’ when the recovery takes hold and is felt broadly throughout the economy. Yet, another year has passed, and ordinary families and small businesses haven’t even recovered to where they were before the financial collapse, much less made up for the wages they’ve lost over the past six years. We need to recognize that hope is not an economic strategy.
“The same challenging conditions I’ve discussed in past meetings haven’t substantively improved.
Wages and salaries are essentially stagnant. Local, independent businesses are struggling to meet payroll, cover their costs and turn a profit. Working families have cut back their spending because they just don’t have the money, they’re scared of losing their jobs, or, in many cases, both.
“In a consumer-driven economy, it should come as no surprise that when consumers are struggling, businesses inevitably feel that pain, particularly in an environment where margins have often already been trimmed down to the bone. Add that to Maryland’s unemployment rate – traditionally a major strength – not keeping pace with improvements seen in the country as a whole.
“Maryland’s 6.4 percent unemployment rate is higher than the national rate of 6.1 percent – something we’ve only experienced twice in the past three and a half decades – during the tech boom of the late 1990s and the 1980 recession. In terms of wages – the oxygen working families need to survive – Maryland’s average wage growth was just 0.4 percent in the first quarter of 2014, far below the rate of inflation for the same period.
“Essentially, workers perceive that their take-home pay is headed in the wrong direction and the purchasing power for Maryland families is, in reality, diminishing. The housing market has failed to rebound in a sustained and meaningful way, particularly with Maryland second worst in the nation in home foreclosure rates.
“Combined, these economic indicators led to a Maryland economy that didn’t grow at all last year – with a 0 percent GDP growth for 2013. As we know, an economy that isn’t growing is actually retracting. This all means uncertainty for families and businesses. They are unsure about their prospects and, as a result, unwilling to make the purchases and investments our consumer-driven economy needs to grow. As great a state as we are and as robust an economic system as we have, uncertainty serves as a serious deterrent to economic growth.
“Whether it’s sequestration, unpredictability in the tax and regulatory environment or an inability to make long-term federal budgeting decisions, most of the uncertainty is based on political problems and decisions, as opposed to global economic conditions. While the federal government has always been and certainly remains a major economic advantage, our over reliance on the public sector carries significant risks. We can embrace our proximity to Washington as a strength without depending on it as our sole basis for economic stability.
“We simply can’t assume that we’re around the corner from returning to the way it was, and back to the decisions we could afford to make in Maryland as a result. The fact remains that we’ll only see the economic growth we’re accustomed to when we get the private sector economy growing. We can only make that happen if we provide a sense of predictability for Maryland families and small businesses.
“As state policymakers, we need to be smart in how we spend taxpayer dollars, recognizing that to invest in the things we need, we have to forego many of the things we simply want. We have to be more forward-looking about how we borrow money as a state. We simply can’t sustain our current patterns of debt accumulation without provoking actions that could do further harm to an already fragile economy — amplifying the significant fiscal and economic challenges we already face.
“As we all know, a sustained economic recovery is going to come down to jobs, both here in Maryland and throughout the nation. As long as we see continued weakness in wages and job growth, consumers will inevitably pull back, causing businesses to struggle and the economy to under perform.
“We simply cannot create any unnecessary road blocks that would make employers reluctant to invest, grow and hire. But if we maintain a cautious mindset and provide a sense of predictability to Maryland families and small businesses, our economic bones are strong enough and our people are resilient enough to withstand this write down and the economic challenges it represents.”
“The fact remains that we’ll only see the economic growth we’re accustomed to when we get the private sector economy growing”
Every time this idea gets posted in this forum one gets accused of being a wealthy teabagger that wants government services for free: or, that we only get the type of teachers we pay for; or, that MD is a wealthy state and we should look at all the great big homes there are in the county.
If is refreshing to see the truth published. It will be ignored… but it is nice to see it published.
And this was brought to light by a liberal democrat no less!
The State of Maryland will just keep raising taxes and fees on everything. Now the moron Brown is proposing free pre-k education at tax payers expense. Wait until ObamaCare hits you in the face. We just got our new medical insurance rates for 2015 and it is a 40% increase in costs to us. Guess what we will be raising costs on EVERYTHING we sell to cover this cost.
Obama is a joke, Owe Malley is a joke and liberalism sucks unless you are lazy and stupid.
Calling your political opponents “lazy and stupid” is neither accurate nor useful.
Legitimate differences of opinion about how and how much taxes are collected and spent exist.
I think the true problem with Liberals is that they suffer from such a crushing remorse for having even a modest amount of success while some don’t that they’re willing to wrest money from strangers against their will to be redistributed to the less fortunate in order to assuage their own feelings of guilt. Anyone opposed to what they see as social justice is worthy of ridicule and any labels of racist, corporate shill, teabagger, and anything else they can think up. In their eyes only the truly heartless do not agree with them. Unfortunately, with such a large percentage of the population shamelessly receiving government handouts, it’ll be difficult to turn the tide.
I think Peter Franchot is a breath of fresh air in an administration full of delusional, self serving morons. Things have become so bad, even the liberals can’t deny the inevitable. The only way to turn our state around is to get every sensible taxpayer to the polls on November 4th (& Oct 23rd- 30th) and vote for Larry Hogan and Boyd Rutherford. Let everyone know their vote does matter and we can turn this financial travesty around.
I wonder where the tens of millions of $ from the casinos have gone? Maybe to illegals since we are a sanctuary state. I wonder where the millions of $ in gas taxes have gone. Not into roads. I’ve driven on better roads in Mexico, and they were dirt. I wonder where the billions of $ O’malley and the rest of the dems have taxed out of us have gone. Not to the citizens of Md, because were worse off then we were.If Brown,Miller, Busch and the rest of the dems get in hold on to your wallet. Or quit work and let the man take care of you.
Yeh well, I just got my 3rd mendacious mailer from D-James. While she is campaigning you would think she is Sarah Palin! In this mailer she is wrapping herself in the flag.
Hey! ole Jamsie! Tell us again about the quarter million for the 20 jobs in Aberdeen that you say is thousands… and thousands of jobs. How come you say no increased taxes when the county has to suck up part of the 15 million per project? Wazzup with dat?
All I can tell you is that I’m voting Democrat, regardless.
And therein lies the problem.
I want every resident of Edgewood, behind the Giant, to expand into Northern Harford County. They deserve to live in much nicer areas and enjoy social living amenities that others enjoy. Otherwise, you are intolerant.
Crime wouldnt happen if those well respected citizens didnt live in a small, congested area.
It is funny how we live in a state that is in the top 5 for tax burden for all the citizens and in the top 5 for average income yet we seem to never have any money. When are we going to stop electing these tax and spend politicians and put in place a group that can be more conservative in spending and bring things more in line with reality?
I believe that Ehrlick didn’t reduce government much either and he did increase fees (not taxes!!) but don’t let facts get in the way. The republican record in governments both state and federal tends to spend the same or more while cutting taxes. Indeed by funding 2 wars, TARP and federal bailouts of GM, ING and the banks, which was by the way a republican administration comedy of blunders. Bush got in office and sought to spend a federal surplus by cutting taxes and increasing expenses (yeah, 9/11 got in the way too) created massive new programs to fight terror, ie Homeland Security was born. It has become the black hole coupled with Afghanistan and Iraq.
Your comments as to spending are pretty much incorrect as to magnitude and result. The current regime had 787 billion in stimulus (eventually known as porkulus). Not a single shovel ready job was created. Bloomberg press just released information that the failed government website for healthcare now costs up to 2 billion dollars. We went from 5% real unemployment under bush to 11% real unemployment today. There are 92 million working age people not working and millions more on unemployment. Most of the jobs created today are service level part time jobs.
While all this has been going on the O’Malley administration raised 40 different taxes while 8000 small businesses left the state. (This little piece of information was used in the democrat primary by a would be democrat governor wannabe.)
Actually the CBO part of Congress oversight states that 3.3 million jobs were created but you can stick to the party mantra. The hemorrhaging economy and bailout by Bush meant the economy was losing 700,000 + jobs per month. I don’t know that the stimulus is totally responsible for the past economy gains but even if 3.3 million is overstating its impact, you really cant say with a straight face that “no shovel ready” job or any jobs were created by the stimulus? As I recall about a third of the stimulus package were tax cuts to stimulate investing by the private sector…what say you???
The real problem is people who vote for a Party instead of a Person. NO Political party represents my views totally, so I vote for the person who comes closest to being where I’d like my representative to be. People who vote Blindly for someone because that person is a Republican or Democrat and for no other reason are why this state is in such bad shape. WAKE UP! Vote for the person, not the Party…….
We should vote for a divided government. The problem in MD is that there are so many democrats that they simply do whatever they want. We are rapidly approaching hellhole status if we don’t get some balance in the state.
Let’s start a new party and call it the “Limitarian Party”. We can get by with one plank in our platform – TERM LIMITS at every level.