Disappointing news from a key revenue panel is accentuating a difference in approach by the House and Senate on resolving looming budget gaps. The Board of Revenue Estimates Thursday revised its fiscal 2024 and 2025 estimates down by $120 million and $134.9 million respectively from its December forecast. The news, which represents a mostly flat revenue estimate, comes as the Maryland Senate is about to begin budget debates. The larger projected future deficits are driven by the costs of the landmark Blueprint for Maryland’s Future. By fiscal 2028, the costs of that education reform plan outstrip the funding in a dedicated account. The state will have to rely on more general fund revenues to close the gap.
Competitiveness: Another proposal is a bill to dramatically raise the cost of doing business in the state through income tax increases to our smallest of businesses and citizens, among other things. Senate President Ferguson and Senate Budget & Taxation Chair Guzzone said the bill would not move forward in the Senate. Additionally, the state’s labor force participation rate is 65.3 percent, compared to 69.3 percent in January 2020, accounting for more than 180,000 “missing workers” who are no longer employed and aren’t looking for work, according to a recent economic report from the Office of the Comptroller. It is likely that Maryland’s withholding income tax decline is due to retires and residents of higher means fleeing the state for better economic climates.
