(The Center Square) – A hefty surplus is sitting in Maryland’s coffers.
Comptroller Peter Franchot said the state closed the books on fiscal year 2022 reflecting a general fund surplus of $2 billion. The surplus is the second consecutive year Maryland has shown an unanticipated influx of revenues that have led to the state closing out the year in the black.
“Maryland remains fiscally strong and can afford to invest in priority areas like education, transportation, health care and public safety,” Franchot said in a release. “However, we know these good times won’t last forever so it’s important that we prepare now for the economic downturn that we’re starting to see signs of by bolstering our reserve accounts.”
Maryland closed out the year with a $5.5 billion balance in its general fund, with the General Assembly moving $3.5 billion for operating through fiscal year 2023.
Franchot, according to the release, said the surplus is a direct result of income tax collections and the positive impact of federal stimulus dollars, with part of the surplus being transferred to the state’s rainy day fund.
The state, which is mandated by statue, a mere $870 million of the $2 billion fund balance has been moved to the rainy day fund and the fiscal responsibility fund. A final balance of $1.2 billion remains in unassigned revenues.
Republican Gov. Larry Hogan, who is serving out the final month of his second term in office, said the state has turned around its financial standing since when he first took office since he took office eight years ago.
“When our administration took office in 2015, we inherited a $5.1 billion structural budget deficit and an economy struggling under the weight of 43 consecutive tax hikes,” Hogan said in a release. “Eight years later, as we leave office, the state will have a record $4.4 billion in total reserves.
“We achieved this incredible turnaround by putting the state on an unabashedly pro-growth path. Instead of raiding special funds and resorting to budgetary gimmicks, we made tough choices and added to our reserve funds year after year. Instead of more tax hikes, we have cut taxes, tolls, and fees by $4.7 billion while making historic investments in education, crime prevention, and the environment.”
Franchot, according to the release, said the balance transfers to the reserve accounts includes roughly $500 million to the rainy day fund, which will raise its balance to $1.66 billion, with $370 million earmarked for the fiscal responsibility fund. The fiscal responsibility fund benefits K-12 public schools, community colleges, and higher education institutions.
According to the release, the majority of the surplus was driven by an increase in income tax collection from the wealthiest taxpayers and federal stimulus money.