Annapolis, MD – Today, the governor signed legislation called for by Senator Roger Manno, to fundamentally change how Maryland state budgets are built.
There is quite a bit of history behind it. Beginning in December 2014, the Spending Affordability Committee, of which Roger serves as Senate Chair, expressed concern regarding the chronically under-attainment of revenue projections, which necessitates onerous mid-year cuts, and the difficulty in building accurate budgets:
The committee is concerned that a pattern of inaccuracies has developed which has hampered budgeting and contributed to budget shortfalls. In order to better understand and help improve the process of revenue estimation, the Comptroller shall report to the Senate Budget and Taxation Committee, House Appropriations, and House Ways and Means before February 1, 2015 to explain the process used to track and forecast revenue collections and to identify any issues or barriers that may exist to more accurate forecasts. The Comptroller shall also discuss any resource, legal or operational barriers that exist to improving taxpayer compliance and collection of taxes owed.
Subsequently, direction was given to the Department of Legislative Services, the Department of Budget and Management, and the Board of Revenue Estimates of the Comptroller’s office, to study the issue, and develop a new tool / methodology for more accurate revenue forecasting. In December 2016, the committee directed that legislation be developed, implementing a new budget forecasting tool to mitigate the impact of the most volatile revenue source responsible for year-over-year budget disasters: nonwitholding / capital gains revenue. This resulted in the introduction of Senate Bill 371 / House Bill 503.
In addition to the revised revenue forecasting methodology, the legislation substantially increases Rainy Day fund balances, capital construction funding, among other important provisions.
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