Maryland's fiscal problems, which have already caused Gov. Harry Hughes to slash this year's budget and modify spending plans for next year, have shown little improvement over the last three months, state revenue experts reported today.
Comptroller Louis L. Goldstein, delivering the revenue estimates that Hughes will use in drawing up the state budget for the year beginning July 1, said that only $17 million -- or a fraction of a percent -- more in funds will be available than he predicted in September. Goldstein's estimates of plunging state revenues at that time prompted Hughes to warn that the state would face a fiscal crisis without sharp budget cutbacks.
"I'm disappointed," Hughes said this afternoon after hearing the new fiscal report. "I was hoping for a brighter picture and a greater upturn in revenues." He added: "I guess I'm as much concerned about what the next six months or a year hold for us. . . . We [may] really have some troubles."
Both Hughes and the leadership of the legislature, which will convene next month and accept Hughes' fiscal 1981 budget shortly afterward, had hoped that the state's financial situation would brighten considerably this fall as the nation slowly recovered from a recession, which is blamed for the plummeting state resources.
In the last several years, the revenue estimates released in December have shown huge state surpluses, allowing the legislature to enact tax reduction programs and increase state aid to education, mass transit, and local government.
However, the figures Goldstein reported today tended to confirm what Hughes has been arguing since September to sometimes disbelieving legislators and local officials: "The era of the surplus is over."
Hughes reiterated this afternoon there would be little or no funding for new state programs next year and that local officials like Prince George's Executive Lawrence Hogan, who have used state aid to cut their own taxes in recent years, "really can't look for any state aid this year."
However, the governor said that he would prepare his new budget without any increases in taxes. "I don't think [the new estimate] is going to change what we've done in preparing the '82 budget," he said.
Last week, Hughes announced $52 million in cuts in the current budget to help make up for lagging income, sales, and other tax revenues. Those reductions, which included $17 million in actual program curtailments, made up the bulk of the total increased funds available for next year's budget that Goldstein reported today.
The new development was that tax revenues available for the next budget were estimated to be $17 million more than in September, partly because of an upturn in collections for the state sales tax and excise and franchise fees this fall.
In all, the state is now expected to have a surplus of $117.7 million at the end of the fiscal year next July, compared to the estimate of $55.2 million in September. That figure, however, is far less than the $293 million surplus of last year.
And perhaps more significantly, Goldstein's current prediction is that the state will have $19 million less in general funds to spend in the next budget year compared to this year.
Much of the revenue problem has been caused by a drastic decline in collections from the state income tax this year over what had been predicted. Fiscal experts reported today that they expect personal income tax collections to decline $9 million this year and $32 million next year from the already lowered estimates of September.
The rate of growth for income tax collections in the year 1980 is expected to be 8.7 percent over 1979, compared to growth rates of 10.5 and 11.6 percent in the previous two years.