Comptroller Peter Franchot announced on Aug. 29 that revenues for Fiscal Year 2019 came in at $216.6 million above the Board of Revenue Estimates' projections, bringing the unassigned balance of the state's general fund to $351 million, or less than one percent of the total FY 19 operating budget of $44.6 billion.
The final closeout numbers reflect stronger-than-expected revenue growth from capital gains, as well as an increase in Sales and Use Tax (SUT) collections resulting from the 2018 U.S. Supreme Court decision (South Dakota v. Wayfair, Inc.) that allowed states to collect tax from online remote sellers. However, the report also shows weak wage growth and otherwise tepid SUT collections.
"While revenues have again exceeded our modest estimates, this year's figures belie several troubling indicators that increase the possibility of an economic contraction," Franchot said. "Unpredictable swings in trade policy and the ballooning federal deficit, coupled with an unprecedented 121 consecutive months of economic expansion and negative market indicators like the inverted yield curve, all suggest national economic volatility."
Agency staff will continue to monitor economic trends and examine data that are historically accurate predictors of past recessions to look for signs of an approaching downturn.
"Given the indicators we’re seeing, and the potential for disruptions to our economic and fiscal stability in the near future, it would be in our best interest for Gov. Larry Hogan and the General Assembly to exercise fiscal restraint and deposit this fund balance into our Rainy Day Fund," Franchot said. "Policymakers should take a cautious approach on new spending initiatives, no matter how well intended, that would take more money out of the pockets of consumers who power Maryland's economy."
General fund revenues totaled $18.2 billion in FY 2019, which is 1.2 percent above the BRE's projections.