The Maryland Board of Revenue Estimates released its annual report Thursday–forecasting a slight uptick in revenue of $161 million through FY2014, with $127 million coming this fiscal year and $33 million in FY2014.
“This report reflects the fact that the economy is growing, but very modestly,” said Comptroller Peter Franchot—in a statement that accompanied the report. Franchot also serves as chair of the Board of Revenue Estimates in his position as Maryland Comptroller.
Franchot cautioned that declining household incomes, and a modest 2.9 percent increase in sales and use tax, was a sign that Maryland’s economy is still fragile.
“The truth is that sales and use tax, perhaps our most indicative economic indicator, remains incredibly weak,” he said. “Yes, employment is showing noticeable improvement, but wage growth is exceedingly poor – with Maryland’s private sector weekly earnings ranked 46th in the nation.”
Corporate tax revenue is projected to drop 5.4 percent in FY2014.
“Too many Marylanders are taking home less pay at a time when their living costs are rising, meaning they have less discretionary money to spend on themselves and their kids in an economy that’s primarily based on consumer spending,” Franchot said.
A big assumption in the report relies on US lawmakers to steer clear of the fiscal cliff and leave unharmed the $92 billion in annual federal spending in the state.
Franchot said the modest increase in revenue projections are more a reflection of new tax policy than a sign of new business activity.
“It’s important that as we write these revenues up, we do so soberly, understanding that revenue stability should NOT be confused with economic progress,” Franchot said.
The chart below shows all revenue estimates through FY2014.
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