{"id":9126,"date":"2017-12-18T07:00:07","date_gmt":"2017-12-18T12:00:07","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=9126"},"modified":"2017-12-17T19:52:16","modified_gmt":"2017-12-18T00:52:16","slug":"revenue-shortfall-undermines-hogans-claims-on-jobs","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=9126","title":{"rendered":"Revenue Shortfall Undermines Hogan\u2019s Claims on Jobs"},"content":{"rendered":"

By Adam Pagnucco.<\/em><\/p>\n

In 2014, candidate Larry Hogan ran on three issues: jobs, taxes and reforming Annapolis.\u00a0 From 2015 through the present, Governor Larry Hogan has based his agenda on three issues: jobs, taxes and reforming Annapolis.\u00a0 It\u2019s a smart and focused way to campaign and govern and has largely (although perhaps temporarily) neutralized Hogan\u2019s disadvantage as a Republican in blue Maryland.\u00a0 But now the state budget is suffering from a revenue shortfall.\u00a0 That calls into question Hogan\u2019s standing on perhaps his biggest issue: jobs.<\/p>\n

Recent<\/a> polls<\/a> show that jobs and the economy are the second most important issue for Marylanders, trailing only public education.\u00a0 Accordingly, Hogan relentlessly promotes his jobs record in the press and social media, not so subtly using it as justification for his reelection.\u00a0 But if employment was really surging, state revenues should be booming.\u00a0 They\u2019re not.<\/p>\n

One of countless Facebook posts by the Governor on jobs.<\/em><\/p>\n

\"\"<\/a><\/p>\n

Last week, the Board of Revenue Estimates<\/a>, comprised of the Comptroller, the Treasurer and the Secretary of Budget and Management, voted to reduce the state\u2019s revenue projection for FY18 (the current fiscal year) by $73 million<\/a>.\u00a0 The reduction<\/a> included shortfalls of $92 million in income taxes and $33 million in sales and use taxes, which were partially offset by increases of $18 million in estate taxes and $17 million in corporate income taxes.<\/p>\n

A summary of the shortfall released by the Board of Revenue Estimates.<\/em><\/p>\n

\"\"<\/a><\/p>\n

Given the fact that the November income tax distributions were down by 26% in Baltimore County, 29% in Montgomery County and 30% in Howard County<\/a>, it\u2019s not surprising that the state\u2019s income tax projections would take a hit.\u00a0 In those three counties, tax planning by the wealthy to take advantage of next year\u2019s federal tax cuts was probably a factor in their shortfalls.\u00a0 The fact that Maryland has the highest percentage of millionaire households of any state in the country<\/a> leaves it vulnerable to these kinds of revenue swings.<\/p>\n

But that\u2019s not all.\u00a0 The $33 million decline in projected sales and use taxes does not relate to tax planning by the rich.\u00a0 That\u2019s a similar situation to what MoCo is experiencing as half the county\u2019s shortfall comes from taxes other than income taxes<\/a>.\u00a0 Hogan is dealing with the same problem as MoCo\u2019s county elected officials: for all their claims that the economy is strong<\/a>, healthy economies tend to not produce significant revenue shortfalls. \u00a0Recent employment estimates are often revised substantially soon after their release<\/a>, but current year revenue declines are something that governments have to deal with in the near term.<\/p>\n

Here\u2019s what Comptroller Peter Franchot had to say about the state\u2019s falling revenue projections<\/a>:<\/p>\n

The revenue projections that have been brought to this Board for approval were meticulously and carefully crafted based on what we know \u2026 and the trends we are seeing \u2026 and the data we are receiving. Once Congress approves a final version of the tax reform legislation, our experts here will work diligently to determine its impact on Marylanders\u2019 income and our state\u2019s fiscal future and propose revisions to our revenue estimates where appropriate.<\/p>\n

In other words, we\u2019re doing the best we can with the information we have. But, here\u2019s what we do know and here\u2019s what the numbers tell us. While we have undoubtedly made considerable progress after the crippling effects of the 2008 Recession, with an unemployment rate hovering around 4 percent and stock market trends that are headed in the right direction, the fact of the matter is that thousands of Maryland working families and small business owners who were affected the most by the economic crash nearly a decade ago haven\u2019t fully recovered.<\/p>\n

We continue to see that with declining sales and use tax revenue. With wages and salaries that are lackluster at best. Even those who are employed with good-paying jobs have \u2013 in more cases than not \u2013 elected to put their disposable incomes in their piggy banks instead of putting money back in our local economy. And who can blame them?<\/p>\n

With all the uncertainty that\u2019s being produced by Washington at an almost daily basis, coupled with the continued fiscal and economic challenges that our state and our communities face, it\u2019s understandable why so many of our citizens remain hesitant and timid about how they spend their hard-earned incomes.<\/p><\/blockquote>\n

Let\u2019s remember that Franchot has a famously cooperative relationship with Hogan<\/a>.\u00a0 Even so, Franchot is saying that the state\u2019s economy has not fully recovered from the Great Recession \u2013 which is exactly what we wrote about MoCo<\/a> before the revenue crash.<\/p>\n

This is the opposite of Larry Hogan\u2019s message that he has been great on jobs.\u00a0 His opponents are sure to take notice.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. In 2014, candidate Larry Hogan ran on three issues: jobs, taxes and reforming Annapolis.\u00a0 From 2015 through the present, Governor Larry Hogan has based his agenda on three issues: jobs, taxes and reforming Annapolis.\u00a0 It\u2019s a smart and focused way to campaign and govern and has largely (although perhaps temporarily) neutralized Hogan\u2019s … Continue reading Revenue Shortfall Undermines Hogan\u2019s Claims on Jobs<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,33,1197,134],"tags":[1545,1368,968,1539],"class_list":["post-9126","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-budget","category-larry-hogan","category-taxes","tag-adam-pagnucco","tag-budget","tag-larry-hogan","tag-taxes"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-2nc","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9126"}],"version-history":[{"count":3,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9126\/revisions"}],"predecessor-version":[{"id":9131,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/9126\/revisions\/9131"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}