ANNAPOLIS – (WMAL) Maryland’s Comptroller said Wednesday revenue estimates for the next fiscal year are up – way up – thanks to the new federal tax law. Comptroller Peter Franchot urged restraint with the new money, warning of a coming rainy day.
Estimates are up $433 million, he said, entirely due to the new tax law. That money should not be taken as an indication that Maryland’s economy is doing any better, he said.
“New money coming in is not because of new economic activity. It’s because of changes in the federal tax code,” he told WMAL. “We’ve had a very sluggish wage growth and job growth for the last ten years, and it’s pretty well the new normal – not a lot of economic growth.”
The General Assembly is exploring ways to return some of the expected windfall to Maryland taxpayers, which Franchot said he supports. Lawmakers may be licking their chops at the prospect of so much more money ready to be spent, but Franchot wants to see the remainder locked away.
“Whatever money they do not return, they should put aside for a rainy day, because a rainy day is going to come,” Franchot said, citing uncertainty and volatility in the White House. “We could really need that extra money available as a stopgap down the road if the recession which is predicted by some people happens, or if there are large increases in interest rates.”
He said the revision is the largest he can remember, though it’s not because Maryland is seeing any significant economic growth.
“It’s not real money that’s coming in,” he said. “It’s simply a windfall.”
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