Governor Hogan has held the line on new spending. In his 2016 budget he refused to spend more than what the state was taking in in revenue. A commitment not realized by state government in a decade. In addition he cut future growth by requiring permanent cuts in departmental budgets and by refusing to spend additional monies authorized by the legislature.
After only 8 months in office, the Governor’s leadership on the budget has paid off and the 2015 fiscal year has ended strong with a $295M Maryland budget surplus.
Governor Larry Hogan Applauds $295 Million End-of-Year Budget Closeout
September 3, 2015
$84 Million in State Agency Reversions Surpasses Estimates by $54 Million and Represents Largest Excess in Over a Decade
ANNAPOLIS, MD – Governor Larry Hogan today applauded the end-of-year budget closeout report showing that Maryland finished the fiscal year with $295 million in the estimated fund balance. $84 million of the total comes from state agency reversions, which is $54 million more than estimated. This is the state’s largest over-attainment in reversions since FY 2003 and reflects more careful management of budgets in state government. Additionally, the state benefited from $214 million in higher-than-anticipated revenues, the largest contribution coming from the personal income tax.
“These are great numbers and even better news for Maryland taxpayers,” Governor Hogan said. “I am particularly proud of the fact that more than $80 million is from agencies returning unused dollars back to the state, highlighting the hard work our administration is undertaking to rein in spending and manage government responsibly. Our growing revenues mean Marylanders are making more money, and that means Maryland businesses are making more money. All this points to a growing economy that puts us on a positive path moving forward.”
Despite the $295 million closeout, Governor Hogan cautioned that these funds should not be seen as a windfall and must be invested prudently.
“Even with this encouraging news, the budget passed by the General Assembly forces the state to confront a $1.7 billion structural deficit over the next four years, and unless we continue to push for more budget accountability, it will only grow,” Governor Hogan said. “This money should be used to further stabilize the state’s finances, address our pension obligations, or be put back into the pockets of taxpayers.”
Maryland Has $295M Budget Surplus After Surge In Tax Collections
By: Bryan P. Sears, in the Daily Record
Maryland ended the fiscal 2015 budget year with a $295.3 million surplus, but the governor and the state’s tax collector are divided over what to do with the money.
The surplus was driven by increases in state revenue, including higher-than-expected personal income tax collections and lower than budgeted state spending.
“These revenue figures highlight an economy that has improved but is still fragile and has not returned to pre-recession growth rates,” Comptroller Peter V.R. Franchot said. “We must proceed with the utmost caution and continue on a prudent fiscal course in the months ahead. I firmly believe any fund balance must be saved and not spent to assure Maryland taxpayers that their government understands the uncertain fiscal and economic climate.”
Franchot called for a moratorium on new or increased taxes. Last month, he told the Maryland Chamber of Commerce that he also believed the state was not in a position to cut taxes.
While Franchot called for the state to stay the course, Gov. Larry Hogan said some of the budget surplus should be used for tax cuts.
Hogan said the end of year figures were good news.
“Our growing revenues mean Marylanders are making more money, and that means Maryland businesses are making more money,” Hogan said in a statement. “All this points to a growing economy that puts us on a positive path moving forward.”
Hogan, who took office nearly six months into the fiscal year and faced a $750 million structural budget deficit, said efforts to rein in state spending resulted in agencies spending $84 million less than budgeted.
“This money should be used to further stabilize the state’s finances, address our pension obligations, or be put back into the pockets of taxpayers,” Hogan said.
Sales tax collections in the state increased by 5 percent, but officials in the Office of the Comptroller noted that the figure included nearly nine full months of collections from Amazon and its subsidiaries. The online retailer was required to start paying Maryland sales tax once it opened a warehouse in Baltimore.
Analysts noted that personal income tax collections increased as a result of capital gains taxes.
Warren Deschneaux, the legislature’s chief budget analyst, told county officials last month that similar increases based on capital gains taxes could not be counted on in future years.
“We won the lottery, but I don’t think we can count on winning the lottery every year and particularly next year,” Deschenaux said during a presentation at the Maryland Association of Counties conference in Ocean City.