Refreshingly candid assessment from Franchot...
Comptroller Franchot's Statement on New Revenue Estimates
ANNAPOLIS (December 13, 2017) - The Board of Revenue Estimates voted today to reduce by $73.2 million the revenue projection for the State of Maryland for Fiscal Year 2018 and to increase by $11 million the estimate for fiscal year 2019 . That establishes a $17.6 billion revenue estimate for the next fiscal year, which begins in June 2018.
The Board's actions are largely driven by continued weaker-than-anticipated sales tax revenues as consumers remain reluctant or unable to spend. Additionally, non-nexus online shopping continues to cut into tax revenues and hinders the growth of brick-and-mortar Maryland retailers. The negotiations over tax bills in Washington continue to be monitored; once final action is adopted , the impact on Maryland revenues will be added into future revenue estimates.
Following are Comptroller Franchot's remarks, as prepared for delivery:
"I know a lot of Marylanders and my colleagues at the state and local levels are wondering how Maryland will be impacted by the federal tax reform legislation being considered by Congress.
And like each of you, it is my hope that common sense will prevail and that our lawmakers will think long and hard before enacting provisions that will have dramatic effects on middle-class families and state revenues.
The revenue projections that have been brought to this Board for approval were meticulously and carefully crafted based on what we know ... and the trends we are seeing ... and the data we are receiving. Once Congress approves a final version of the tax reform legislation, our experts here will work diligently to determine its impact on Marylanders' income and our state's fiscal future and propose revisions to our revenue estimates where appropriate.
In other words, we're doing the best we can with the information we have. But, here's what we do know and here's what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession, with an unemployment rate hovering around 4 percent and stock market trends that are headed in the right direction, the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven't fully recovered.
We continue to see that with declining sales and use tax revenue. With wages and salaries that are lackluster at best. Even those who are employed with good-paying jobs have – in more cases than not – elected to put their disposable incomes in their piggy banks instead of putting money back in our local economy. And who can blame them?
With all the uncertainty that's being produced by Washington at an almost daily basis, coupled with the continued fiscal and economic challenges that our state and our communities face. It's understandable why so many of our citizens remain hesitant and timid about how they spend their hard-earned incomes.
Given the challenges that our working families and small business owners face and the potential impact that will emerge from federal tax reform legislation, it is my hope that the General Assembly will continue to exercise fiscal restraint as they consider legislation that will impact the fiscal health of our state and our citizens.
I renew my call for a moratorium on new taxes and fees, because the last thing Maryland families and businesses need are further disruptions to their budgets in a time when some of our friends and neighbors are struggling to make ends' meet and pay the bills.
At the state level, we have to be careful and smart on how we spend the taxpayers' dime and simply forego the things that we want... in order for to pay for the things that we need. And I hope that the General Assembly will once again consider legislation that will require online retailers to collect and remit sales and use taxes.
And I want to emphasize that this is not a new tax ... or a new fee ... this is simply leveling the playing field for our small businesses that diligently comply with our sales and use tax laws against online retailers who have gotten away with not doing so because of legislative inaction. Because at the end of the day, government should not be picking winners and losers – and when we force small businesses to compete with online retail giants that offer convenience, lower prices, and don't collect and remit sales tax we are putting our brick-and-mortar stores and main street retailers at a tremendous disadvantage.
I was proud to testify in support of the Main Street Fairness Act that Senator Madaleno and Delegate Hixson introduced last session, and I do hope that legislators can work in a bipartisan fashion to advance this legislation in the 2018 General Assembly session.
So, let me close by urging those of you who have not yet completed your holiday shopping to go out and support our small businesses and local retail stores that not only offer great and quality products, but serve as the bedrock of our communities and our state economy."
View the data here: http://comptroller.marylandtaxes.com/Media_Services/wp-content/upLoads/December_2017_BRE_Update.pdf
Comptroller Franchot's Statement on New Revenue Estimates
ANNAPOLIS (December 13, 2017) - The Board of Revenue Estimates voted today to reduce by $73.2 million the revenue projection for the State of Maryland for Fiscal Year 2018 and to increase by $11 million the estimate for fiscal year 2019 . That establishes a $17.6 billion revenue estimate for the next fiscal year, which begins in June 2018.
The Board's actions are largely driven by continued weaker-than-anticipated sales tax revenues as consumers remain reluctant or unable to spend. Additionally, non-nexus online shopping continues to cut into tax revenues and hinders the growth of brick-and-mortar Maryland retailers. The negotiations over tax bills in Washington continue to be monitored; once final action is adopted , the impact on Maryland revenues will be added into future revenue estimates.
Following are Comptroller Franchot's remarks, as prepared for delivery:
"I know a lot of Marylanders and my colleagues at the state and local levels are wondering how Maryland will be impacted by the federal tax reform legislation being considered by Congress.
And like each of you, it is my hope that common sense will prevail and that our lawmakers will think long and hard before enacting provisions that will have dramatic effects on middle-class families and state revenues.
The revenue projections that have been brought to this Board for approval were meticulously and carefully crafted based on what we know ... and the trends we are seeing ... and the data we are receiving. Once Congress approves a final version of the tax reform legislation, our experts here will work diligently to determine its impact on Marylanders' income and our state's fiscal future and propose revisions to our revenue estimates where appropriate.
In other words, we're doing the best we can with the information we have. But, here's what we do know and here's what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession, with an unemployment rate hovering around 4 percent and stock market trends that are headed in the right direction, the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven't fully recovered.
We continue to see that with declining sales and use tax revenue. With wages and salaries that are lackluster at best. Even those who are employed with good-paying jobs have – in more cases than not – elected to put their disposable incomes in their piggy banks instead of putting money back in our local economy. And who can blame them?
With all the uncertainty that's being produced by Washington at an almost daily basis, coupled with the continued fiscal and economic challenges that our state and our communities face. It's understandable why so many of our citizens remain hesitant and timid about how they spend their hard-earned incomes.
Given the challenges that our working families and small business owners face and the potential impact that will emerge from federal tax reform legislation, it is my hope that the General Assembly will continue to exercise fiscal restraint as they consider legislation that will impact the fiscal health of our state and our citizens.
I renew my call for a moratorium on new taxes and fees, because the last thing Maryland families and businesses need are further disruptions to their budgets in a time when some of our friends and neighbors are struggling to make ends' meet and pay the bills.
At the state level, we have to be careful and smart on how we spend the taxpayers' dime and simply forego the things that we want... in order for to pay for the things that we need. And I hope that the General Assembly will once again consider legislation that will require online retailers to collect and remit sales and use taxes.
And I want to emphasize that this is not a new tax ... or a new fee ... this is simply leveling the playing field for our small businesses that diligently comply with our sales and use tax laws against online retailers who have gotten away with not doing so because of legislative inaction. Because at the end of the day, government should not be picking winners and losers – and when we force small businesses to compete with online retail giants that offer convenience, lower prices, and don't collect and remit sales tax we are putting our brick-and-mortar stores and main street retailers at a tremendous disadvantage.
I was proud to testify in support of the Main Street Fairness Act that Senator Madaleno and Delegate Hixson introduced last session, and I do hope that legislators can work in a bipartisan fashion to advance this legislation in the 2018 General Assembly session.
So, let me close by urging those of you who have not yet completed your holiday shopping to go out and support our small businesses and local retail stores that not only offer great and quality products, but serve as the bedrock of our communities and our state economy."
View the data here: http://comptroller.marylandtaxes.com/Media_Services/wp-content/upLoads/December_2017_BRE_Update.pdf