Wednesday, April 24, 2013

Maryland Tax Revenue Come and Gone

Inspired by a recent discussion in the comment section, I decided to do some research into Maryland tax revenues over the past five years.  As expenditure projections have remained solid, our State's revenue has dipped, despite seemingly ever-increasing taxes.  I think it will be incumbent upon "boom-time" legislators to limit future expenditures with built-in cut-backs in the case of rising unemployment or dwindling incomes.  Easier said than done, but there must be some form of debrief and "lessons learned" now that revenues are back on track.

In 2008, Maryland Income Tax revenue (on the heels of various tax increases in 2007) was just over $6.9 billion.  To put this in context, Maryland's projected income tax revenue for 2013 is $7.7 billion.  In 2009, that revenue dropped to $6.5 billion, followed by $6.2 billion in 2010.  In 2011, we began to show some recovery with income tax revenues rising to $6.6 billion.  Last year income tax revenues increased substantially to $7.1 billion, putting us back to where we were in 2008.  Projected income tax revenue for 2013 is $7.7 billion.  Notably, 2012 revenues were premised on tax increases during a special session that year.  (Change Maryland provides an easy reference to all of the tax and fee increases over the past six years here.)

Interestingly, Maryland's Sales Tax revenue has stayed steady after last being increased in 2007 from 5% to 6%:

2008: $3.7 billion
2009: $3.9 billion
2010: $3.8 billion
2011: $3.9 billion
2012: $4.1 billion
2013 (Projected): $4.1 billion

Total tax revenue, predictably, has a pattern similar to that shown for income taxes:

2008: $15.7 billion
2009: $15.3 billion
2010: $15.2 billion
2011: $16.0 billion
2012: $17.1 billion

Unfortunately, while looking at revenue is somewhat straight-forward, attempting to look at expenditures is slightly more complicated.  Looking at the Fiscal Digest for each year, as corrected the following year, here are the total appropriations from the General Fund:

2008: $14.5 billion
2009: $14.3 billion
2010: $13.4 billion
2011: $13.3 billion
2012: 14.7 billion

I normally try not to do math this early in the morning, and am not sure what we can make of these numbers, but the mantra of "out-of-control spending" seems to fall through here.  Then again, with a background of depleted transportation funds, recently replenished by an increased gas tax, and unfunded pension benefit plans, these numbers can be deceiving. 

Governing Magazine, State Tax Collection
Maryland Board of Revenue, Maryland General Fund and Budget Restoration Fund Revenues Report (PDF)
Maryland Government Budget, Fiscal Digests