Due to the economic impacts of the pandemic disruptions, Maryland Comptroller Peter Franchot says he expects state government revenue to drop by as much as 25 percent heading into the next fiscal year. Local governments in Prince George’s County are already bracing for a significant reduction in revenue.
“We know it is going to be significant and historic,” said Franchot in an March 27, 2020, interview. “It could be a 20 to 25 percent reduction in state revenues for the forseeable future.”
Franchot noted the Comptroller’s Office could not even issue a state revenue estimate for March 2020.
“We are still flying blind,” said Franchot. “All the signals are pointing to a significant reduction in state revenue.”
Maryland has a few tools at its disposal to deal with a big reduction in state revenue.
As the Baltimore Sun noted March 20, 2020, Maryland legislators approved an emergency measure allowing Gov. Larry Hogan to reallocate $50 million from state reserves to respond to coronavirus and, in the budget, empowered him to tap another $100 million if needed.
Additionally, Franchot noted that the Maryland Board of Public Works – a body made up of the governor, the comptroller, and the treasurer, can make unilateral line-item cuts to the Maryland budget of up to 25 percent. Such a power may come in handy in a situation where a global pandemic flatlines the fourth quarter of your fiscal year.
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