Tax flow picked up late in 1992 STATE HOUSE REPORT

February 03, 1993|By Marina Sarris | Marina Sarris,Staff Writer

Thanks to a strong Christmas-shopping season, Maryland collected slightly more taxes than it expected during the last half of 1992 -- good news for the recession-weary state.

Comptroller Louis L. Goldstein announced yesterday that collections of sales and income taxes were slightly above estimates. By contrast, tax receipts during previous six-month periods since 1991 came in below estimates, contributing to the need for repeated cuts to balance the state's budget.

Nonetheless, Mr. Goldstein cautioned that the state's economy is not "out of the woods" yet. He noted that big companies are still laying off workers in Maryland.

"I remain very concerned about the continuing announcement of layoffs by major Maryland employers and out-of-state employers doing business in Maryland," he said, noting job losses at companies such as Westinghouse.

Gov. William Donald Schaefer said the new tax figures did not surprise him. "That's nothing new," Mr. Schaefer said. "I'm worried about layoffs too. We're watching our revenues."

The December shopping season helped push collection of sales and use taxes $2.35 million, or 0.3 percent, above estimates for August through January, Mr. Goldstein said. Those revenues reflect sales that took place from July through December, the first six months of the 1993 fiscal year.

The state collected $20.7 million, or 12 percent, more in sales taxes in December 1992 than it did in December 1991, Mr. Goldstein said.

"We've not seen that large a month-to-month increase in recent memory," he said. "The good sales and use tax collections seem to reflect great consumer-buying activity during the holiday and more consumer confidence."

Some $9 million to $10 million of the increase came from items that had not been taxed before last year, officials said. The 1992 General Assembly voted to apply the state's 5 percent sales tax to snacks, prepared foods sold in grocery stores, newspapers and other previously untaxed goods and services.

Maryland biggest source of general fund revenues, individual and corporation income taxes, produced $1.578 billion from August through September -- $12.6 million, or 0.8 percent, over estimates.

Mr. Goldstein urged caution in interpreting those figures because revenues could drop if the state must mail out higher income tax refunds to taxpayers this spring.

The amount of the average state refund last year rose from $350 to $385 as unemployed or underemployed people received more money back, he said.

The chairman of the powerful Senate Budget and Taxation Committee said yesterday that legislators still plan to be very cautious in reviewing the governor's proposed budget for next year.

Fearful of being burned again by overly optimistic revenue projections, many lawmakers plan to wield a knife to the proposal, said Sen. Laurence Levitan, a Montgomery County Democrat.

"I see sentiment for cutting," he said.

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