Maryland’s revenue expected to remain mostly static next fiscal year, officials say
Revenue expectations for fiscal year 2025 are slated to see a slight dip but are projected to be mostly unchanged as lawmakers prepare for the 2024 legislative session, Maryland’s top fiscal officers said Thursday.
“Not a lot has changed since we met here last,” State Treasurer Dereck Davis said during the final Board of Revenue Estimates meeting of 2023.
Fiscal year 2025, which will begin in July, is projected to see a minor decrease of approximately $163 million in expected revenue compared with the board’s September forecast, giving the governor and the General Assembly $24.9 billion to work with when budget negotiations begin next year.
Comptroller Brooke Lierman said that “post-pandemic behavior” is part of the cause for the decrease for fiscal year 2025, noting that most Marylanders have likely spent pandemic savings or stimulus funds and are now tightening their belts.
Though estimated funds for the 2025 budget have slightly depressed from the board’s previous meeting, the Board of Revenue Estimates projected $24.6 billion for fiscal year 2024’s general fund — nearly identical to September’s projection, though with a small uptick of $78.3 million due to overfunding in Maryland’s reserve fund and a raise in the interest income forecast.
The general fund is money available in the state’s overall budget that is not dedicated to a specific agency or program, allowing the governor to move funding around as he sees fit.
Gov. Wes Moore, a Democrat, has warned officials on multiple occasions during the interim to expect a leaner budget than the one passed for the 2024 fiscal year.
Consisting only of the comptroller, state treasurer and budget secretary, the Board of Revenue Estimates provides projections for the general fund, which is partly composed of revenue generated by the state lottery and state revenues from personal, corporate, and sales and use taxes.
The general fund also receives revenue from the federal government, which narrowly avoided a shutdown after the Board of Revenue Estimates released its September projections.
Lierman noted that the short-term federal budget agreement approved by Congress will expire next month, and urged federal lawmakers to settle the budget and avoid another potential shutdown.
“I’m not sure how this became the new normal, but it’s incredibly frustrating and certainly irresponsible,” she said.
The $63.1 billion budget approved for fiscal year 2024 invested $1 billion in education and transportation, while maintaining $2.5 billion in Maryland’s rainy day fund.
But Moore cautioned state and local officials over the summer to be frugal with their asks in the state budget for fiscal year 2025 due to potentially rough fiscal times on the horizon.
Maryland is already facing tough budgetary decisions. Last week, the Department of Transportation announced a proposed reduction of $3.3 billion in transportation projects, which is poised to curb hundreds of millions of dollars worth of highway and road projects for the next six years and affect funding for the state’s public transit systems.
“The governor articulated our approach very clearly in his comments … just last week: The administration will continue to focus on protecting the interests of our state and ensure we’re on firm financial footing as we roll out our agenda,” said Department of Budget and Management Secretary Helene Grady.
Moore and the General Assembly will take up the budget during the 90-day legislative session, which convenes Jan. 10. The legislature is constitutionally required to pass a budget before adjourning for the year.