Maryland exceeded revenue projections and finished its most recent fiscal year with a $400 million fund balance but should save the money and cut spending in preparation for lean economic times, the state comptroller said Thursday.
Comptroller Peter V.R. Franchot on Thursday released the state’s final financial numbers for fiscal year 2011, which ended June 30, revealing that the state collected $13.5 billion in general fund revenues - $314 million more than officials initially projected. After fund transfers, the state finished with a $400 million fund balance.
Mr. Franchot, a Democrat, called on legislators and Gov. Martin O’Malley to keep the money in the state’s rainy-day fund for at least six to 12 months to help weather difficult times that could intensify with growing doubt over the nation’s economic future.
“A delay is essential, in my opinion, because we have tough times ahead of us,” he said. “Caution is very important.”
Mr. Franchot has spoken often in recent weeks of the state’s need to be cautious in the aftermath of last month’s downgrade of the nation’s credit rating by Standard & Poor’s - a move that has caused analysts to speculate the country could be headed for the second part of a double-dip recession.
Maryland has maintained its maximum triple-A rating with all three credit agencies but was given a negative outlook by Moody’s Investors Services.
The comptroller said Thursday the state’s fund balance was due largely to taxpayer income increases in the first half of the year but that revenues trailed off after that. He also pointed out that the balance came despite corporate income and sales and use taxes falling $92 million short of projections - which he called an indicator of the struggling economy.
State budget analysts also said in July that the state should hold on to any extra revenues this year.
Officials could be tempted to spend the funds, as legislators hope to trim or close a $1.1-billion structural deficit during next year’s General Assembly and also have discussed increasing spending in some areas - including transportation infrastructure.
Virginia finished the fiscal year with a $545 million surplus and put $133 million into its rainy-day fund while allotting much of the remainder for causes such as Chesapeake Bay clean-up and transportation, as required by state law.
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David Hill joined The Washington Times in February 2011 as a Maryland political reporter. He can be reached at email@example.com.
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