Democrats, who have controlled the State House for decades and usually deploy a united front, are ensnared in a behind-the-scenes fight over how to pay for policies that are driving multibillion-dollar deficit projections not seen since the Great Recession.
The latest bad news comes from lackluster income tax receipts, which are now expected to bring in $255 million less than projected over the current and incoming fiscal years, state economic forecasters said Thursday. Tax collectors are seeing less money withheld from Maryland residents’ paychecks than anticipated over the past three quarters, despite record-low unemployment, which suggests a strong labor market.
The adjustment, along with other developments, means the budget Gov. Wes Moore (D) introduced in January needs more than $500 million in extra cash to balance it. The Senate Budget and Taxation Committee is scheduled to vote Friday on its plan to balance the budget.
Members of the Board of Revenue Estimates could not explain Thursday why seemingly positive economic data was not translating into tax revenue for the state.
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