Gov. Harry Hughes said today that the ailing national economy, which has brought record-high unemployment to Maryland, now threatens a wide range of programs dependent upon state tax collections, including the hiring of additional workers needed to process applications for food stamps from the growing ranks of the unemployed.
Lower collections from sales, corporate and income taxes in the last three months will result in a drop of $8.8 million in state revenues for fiscal 1982, Hughes said, even though the state collected more than anticipated from lottery sales and interest on state investments.
As a result, Hughes said he will not propose additional or new funding for a wide range of programs--including ones for battered spouses, autistic children, and additional food stamp workers--when he makes new budget recommendations to the legislature next week.
The $8.8 million downturn in estimated revenues is a slender portion of the state's overall budget of nearly $6 billion, but it reflects Maryland's lethargic response to the nation's continuing economic problems.
Maryland derives most of its revenues from state income and sales taxes, both of which have been adversely affected by rising unemployment and high interest rates. New unemployment figures released this week showed the highest jobless rate state-wide since World War II. If the trend continues, and if interest rates remain high, the state could collect fewer revenues than expected for the remainder of this fiscal year.
Originally, state officials predicted that Maryland, which is in better condition economically than many states, would begin to rebound during the first half of the current fiscal year. Now those officials say the improvement is not expected until the last half. If the economy begins to turn around before the end of the year, the officials said the state could enjoy a $6 million surplus in revenues in fiscal 1983.
In his 1983 budget proposal, Hughes included $145 million that he expected would be left over as a surplus from this year. As a result of today's revised revenue estimates and other adjustments, the amount available for 1983 programs is now down to $136 million.
Members of the state Board of Revenue Estimates today urged the legislature to be cautious in its approval of measures that might reduce states revenunes or increase state spending.
Compounding the significance of the decline in tax collections is the possibility that the state will lose hundreds of millions of dollars in federal revenues because of federal tax laws and cutbacks in federals funds.
The supplemental budget, which the governor proposes each year after the new revenue estimates have been calculated, has sometimes contained as much as $15 million to $20 million in additional funds for state programs. But this year, Hughes said, it will be lower than last year's $7.7 million.
"There are many programs that do not cost a lot of money that I'd like to be able to fund," Hughes said. "But we simply have to tighten our belt. It's obvious that the funds are not available to do all the things that people want us to do. The money simply is not there."
Hughes had also planned to use money in the supplemental budget for prison projects, particularly the relocation of prisoners who are in overcrowded institutions. He said he could not specify how much money is still needed for this year's prison programs, but Corrections Secretary Thomas W. Schmidt has called for $3 million in extra funds.