Maryland finished fiscal 2022 with a surplus of $2 billion, Comptroller Peter Franchot reported.
In a statement Wednesday, Franchot said the state closed the books on the fiscal year with $5.5 billion in the General Fund, of which the General Assembly allocated $3.5 billion to the fiscal 2023 budget.
Of the remaining $2 billion, state law calls for $870 million to be automatically transferred to two reserve funds: $500 million to the Rainy Day Fund and $370 million to the Fiscal Responsibility Fund, which goes to school funding and pay raises for state workers.
Franchot’s office said in the statement that the extra money came from personal tax receipts from the wealthiest taxpayers and “the sustained impact of federal stimulus aid coursing through the state’s economy.”
With warning signs of “choppy economic and fiscal waters in the coming years,” Franchot said, the rest of the surplus should go to the Rainy Day Fund as well.
“We continue to feel the ripple effects from the COVID-related fiscal policies, but it’s important to note that those ripples will grow smaller and less significant in the years ahead,” Franchot said Wednesday at a Board of Public Works meeting Wednesday, the statement said. “In simpler terms, future governors and legislatures should not bank on billion-dollar surpluses to be the norm as we cannot, and never have, defied the laws of economic gravity.”
He said that the pandemic showed the need to keep extra resources on hand. During the pandemic, he said, “Many residents and businesses who desperately needed help did not receive a dime of assistance from state government, either because they weren’t eligible for the programs or because the money ran out.
“We can’t let that happen again, and until we know what our economic conditions will be like a year from now, it would be imprudent to spend this money.”