New revenue estimates - more moderately good news

Photo: marylandreporter.com

Have you have been concentrating on the Orioles, Nats, Redskins and Ravens? Then you may not have noticed that it is also revenue season in Maryland.

Last week we reported that the state's actual revenue collections for the past fiscal year exceeded the official estimates by $230 million. This week the state's official revenue estimating Board revised its estimates for the current fiscal year, and issued the first estimate for the upcoming year: fiscal year 2014.

The current year's estimates improved by $181 million. We did not expect the full $230 million to carry forward into future years because some of it reflected temporary gains or timing changes.

The estimate for fiscal year 2014 is $15.3 billion, anticipating just modest 2.7% growth over the increased annual amount.

This continues the trend of moderately good news. These improved estimates certainly do not solve Maryland's budget shortfalls. And they certainly do not mean that the moderate tax increases on higher-earning households were unnecessary.

These revenue estimates will put the budget for next year within reasonable range of arithmetic balance. However, much of that balance would arise from spending down the surpluses from 2012 and 2013. That is not a sustainable plan.

The revenues for fiscal year 2014 will still be around $1/2 billion short of "structural balance," in which ongoing revenues are sufficient to meet ongoing expenditures.

In funding this remaining gap, the Governor and legislature should continue to protect funding for education, healthcare, and basic needs of the many households that still suffer in the weak national economy.