Maryland’s nearly $2B surplus boosts rainy day fund, schools and state union pay hikes
Maryland has a revenue surplus of nearly $2 billion in its general fund for the fiscal year that ended June 30, Comptroller Peter Franchot announced Wednesday morning. The surplus stems from “a massive unanticipated influx of revenues” for the second consecutive year, as a result of personal income tax receipts from wealthy taxpayers and federal COVID-19 relief aid. The state had $5.5 billion in its general fund as of June 30, compared to $2.5 billion by the end of June 2021.
This year, the General Assembly allocated $3.5 billion for government operations for the new fiscal year.
State law requires another $500 million to go to the “Rainy Day Fund” and $370 million to the “Fiscal Responsibility Fund,” which is designed to pay for construction and renovation at K-12 public schools and public colleges and universities, as well as state employee pay raises.
That leaves a little over $1.1 billion of unassigned revenue.
Franchot suggested lawmakers send that remaining balance to the Rainy Day Fund, too.
“Future governors and legislatures should not bank on billion-dollar surpluses to be the norm,” Franchot said at the beginning of Wednesday’s Board of Public Works meeting. “With the Federal Reserve tightening monetary policy and inflation continuing to have broad impact on the cost of living and the cost of doing business for Marylanders and our small businesses, it's more likely than not that our state, our nation and our globe are headed for choppy economic and fiscal waters in the coming years.”
Lt. Gov. Boyd Rutherford echoed Franchot’s calls for restraint. Economic experts have predicted that an economic downturn is coming in the next couple of years, he warned.