Amid a recession and with the threat of war looming, key lawmakers in Annapolis fear that the Schaefer administration's revenue projections may be too optimistic and could create another budget shortfall next year.
The spending plan that Gov. William Donald Schaefer will submit to the General Assembly in a few weeks is based on revenue projections that assume the recession will end in Maryland sometime this year.
Although Maryland's economy took a turn for the worse last summer, causing tax collections to plummet and requiring budget cuts, Schaefer's projections still call for the Maryland economy to rebound strongly in July. His budget plan projects a revenue growth for next year of 6.59 percent -- nearly twice the 3.45 percent growth that is now projected for the current budget year.
Del. Tyras S. Athey, D-Anne Arundel, chairman of the House Ways and Means Committee, was skeptical of the growth projection at a budget briefing yesterday.
"I find it a little difficult to believe," Athey said. "I don't think it will happen. Hopefully, it will."
The state's Board of Revenue Estimates is predicting that Maryland's individual income tax collections will be up 9 percent next year, about average for past years but way above the current year's growth rate, which is only 3.8 percent based on the first six months.
"How many of you believe that? If you do, I've got a bridge I want to sell you," said Del. Charles J. Ryan, D-Prince George's, chairman of the House Appropriations Committee.
The Board of Revenue Estimates is predicting the state will bring in $6.29 billion in fees, taxes and investment income in the fiscal year beginning July 1.
William Ratchford, director of the Department of Fiscal Services and the legislature's chief budget analyst, told lawmakers those official estimates may be $75 million too high.
Ratchford accompanied Ryan and House Speaker R. Clayton Mitchell Jr., D-Eastern Shore, yesterday as they dropped in on several committees to discourage members from submitting bills that would cost money if enacted.