Revenue Estimates

The beat goes on . . . the wheel of history continues to revolve . . . the state budget appears to continue to being faced with shortfalls.Well, what else is new? We've been hearing this same song since the summer of 1990.The governor has stated that he will cut "as much as the law allows" from local government to assist in meeting another $500 million in state budget reductions.Carroll County could be hard hit. Perhaps this time, Carroll County employees will have to take their furlough days -- just like their state counterparts have had to do during the past 12 months.

Key lawmakers yesterday ruled out a cut in state income taxes this legislative term after the release of gloomy revenue estimates that were dragged down by the federal budget stalemate and the region's harsh winter weather.The Board of Revenue Estimates yesterday dropped its projection of state revenue by $55 million for the current fiscal year and $77 million for the budget year beginning in July -- reductions that make a tax cut impractical, legislators said."I think they [the projections]

Gov. Parris N. Glendening all but abandoned yesterday a proposal he floated in the last days of his re-election campaign to use the state's budget surplus to accelerate a 10 percent income tax cut for Maryland residents.The governor refused to make any commitments yesterday, even as he was presented with new revenue estimates projecting a surplus of $195 million -- higher than the $173 million that had been projected when he made the suggestion in October.He indicated other issues are a higher priority than speeding up the tax cut."

ANNAPOLIS -- The state budget deficit has reached more than $400 million, the product of an economic crisis so sudden and severe that Gov. William Donald Schaefer said yesterday that the stark numbers "will stagger you."The governor declined to discuss specific figures, but sources familiar with what the state's Board of Revenue Estimates will announce today said the overall deficit for the current fiscal year's budget might be pegged as high as $440 million.Most of the deficit reflects a sharp, across-the-board drop in almost all forms of state tax revenue, which in turn reflects the abrupt slowdown of the state and national economies.

ANNAPOLIS -- For the first time in a long time, the state got some modestly good economic news today.Gov. William Donald Schaefer was told that a new agreement with the federal government will bring in enough federal Medicaid funds to offset most of a continuing decline in sales tax and lottery revenues. The Medicaid money, the state's Board of Revenue Estimates said, will not be enough to prevent another $7 million drop in revenue estimates for this fiscal year, but it is expected to produce a net $13 million revenue increase for the fiscal year that begins July 1.The announcement marked the first time since December 1989 that the governor has been handed a prediction that revenues might actually be going up.There are other signs that the economy may be on the verge of the long-awaited recovery, said Marvin Bond, a spokesman for state Comptroller Louis L. Goldstein.

Harford lawmakers have unanimously adopted a $163 million operating budget that increases spending nearly 10 percent, gives 5,000 county employees raises and maintains the current property tax rate.The vote late Thursday night came after bitter accusations from the county administration that the County Council violated Harford's charter by shifting to education about $200,000 that had been earmarked to cover a projected shortfall in another department's funding."The council has the distinction of passing the first illegal budget in the county's history," said Larry Klimovitz, director of administration.

A fierce political battle of wills that centers on $250,000 of a $163 million Harford budget will resume tomorrow when county lawmakers decide whether to challenge the county executive's line-item veto.The votes of five of the seven County Council members are required to override Executive Eileen M. Rehrmann's veto. The council, with one member absent, voted 4-2 Tuesday night to postpone a vote on the veto until tomorrow night.The council had voted May 27 to transfer $250,000 to education so the school system could upgrade part-time assistant principals to full-time positions at 11 elementary schools.

Gov. Parris N. Glendening sought yesterday to lower expectations about the size and timing of a state tax cut, saying a sharp drop in revenues coupled with deep federal cuts is making it increasingly difficult to find the money needed for a tax cut."I think we will have a tax reduction, but the devil is in the details. In this case, the details are: how much and when," the governor said.The Maryland Chamber of Commerce has called for a tax cut of at least 15 percent, and other business groups have said a cut of 25 percent is needed if Maryland is to overcome its business-unfriendly reputation for having a relatively high personal income tax rate.

The General Assembly will not cut income taxes this year despite having a $1 billion surplus, key lawmakers said yesterday. They said the state should instead spend its riches on education and other priorities. Their assessment was made after state officials announced that Maryland's fiscal picture -- while still rosy -- isn't getting rosier. The release of revenue projections for the next few months dashed remaining hopes to cut income taxes this year. "You can't spend and cut at the same time.

The state Board of Revenue Estimates adopted a rosy report about Maryland's economy and finances yesterday, predicting healthy income growth, low unemployment and swelling tax coffers for the immediate future. General fund revenues for the fiscal year ending June 30 will be about $12.2 billion, the board said, or about $776.5 million more than estimated. But the board's chairman, Comptroller William Donald Schaefer, who voted against adopting the report, couldn't have been more unhappy.