ANNAPOLIS, MD (March 9, 2007)-Comptroller Peter Franchot, Chairman of the Board of Revenue Estimates, today informed Governor Martin O'Malley that general fund revenue projections have been revised downward by $24.4 million for fiscal year 2007 and by $25.8 million for fiscal year 2008. The board's revision now forecasts total general fund revenue of $12.87 billion for FY 2007 and $13.43 billion for FY 2008, growth of 3.7 percent and 4.5 percent respectively.

"These numbers represent a modest mid-course adjustment," said Comptroller Franchot. "Fundamentally the Board's economic forecast from December remains unchanged; but, frankly, that forecast is not exactly cause for celebration. It is clear that we will not be able to grow our way out of the structural deficit mess we find ourselves in. The sooner we begin a comprehensive search for a fiscally prudent long-term solution, the better it will be for the people of Maryland."

The board lowered its estimate of personal income tax by $19.4 million for FY 2007 and by $20.6 million for FY 2008. Additionally, business tax franchise taxes were decreased by $5 million for FY 2007 and $5.1 million for FY 2008, a reduction of 1.1 percent and 3.2 percent respectively. These adjustments result from marginally weaker collections since December than had been anticipated.

"Maryland surely has a stable, strong and diversified economy," said Treasurer Nancy K. Kopp. "But our tax system no longer reflects this economic strength well. Today's revenue estimates, while very close to December's projections, make it clear that we are not benefiting as we have for several years from exorbitant growth in residential housing prices and sales. This change is reflected in both income, sales and property-related taxes.

Today's picture points again to the urgent challenge before the governor and General Assembly as they confront and solve the projected serious gap between revenues and vital essential public services."

Consisting of Comptroller Franchot, State Treasurer Nancy K. Kopp and State Secretary of Budget and Management T. Eloise Foster, the board's revenue estimates help the governor and legislature develop the state's operating budget, ensuring it is balanced as required by the state constitution.

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MEDIA CONTACTS:

Office of the Comptroller:	Joseph Shapiro, 410-260-7305 Christine Duray, 410-260-6346
Treasurer's Office:	Howard Freedlander, 410-260-7418