The Board of Revenue Estimates (BRE) have unanimously approved revenue projections of $18.7 billion for FY 2021 and $19.7 billion for FY 2022. The FY 2021 forecast reflects a $1.4 billion increase (and a $2.1 billion increase for FY 2022) from unofficial estimates that the Board heard at a special nonvoting session in May to better understand the State’s fiscal posture and review several revenue scenarios in the midst of the COVID-19 pandemic. The unofficial guidance issued in May projected up to a $1.1 billion shortfall in FY 2020, a $2.1 billion gap for FY 2021, and a $2.6 billion hole for FY 2022.

Although revenue projections are greater than expected, they are still below official projections issued in March by the BRE. From the Governor’s statement,

“Today’s revenue estimates are still nearly $1 billion less than what was budgeted prior to the pandemic. Because of our early and aggressive actions, Maryland’s fiscal situation is significantly less painful than it could have been.

The FY 2021 estimate officially shows a $672.6 million revenue decrease since the BRE last formally voted on projections in March, which was based on pre-pandemic data. From the Comptroller’s statement,

Several factors drove the rosier-than-anticipated revenue estimates, including a labor market that held up better than initially feared and the success of federal programs — direct stimulus payments, the Paycheck Protection Program and the $600 federal weekly unemployment subsidy for more than one million Marylanders — that kept the economy flowing and staved off an economic catastrophe.

While projections are higher than expected, caution was expressed. As reported by Maryland Matters,

David Farkas, acting director of the Bureau of Revenue Estimates, cautioned that new estimates could be very volatile and may change before the board makes final estimates in December that will guide the state’s budget process in 2021.

“It’s very difficult to predict the future and that is even more the case for this particular forecast,” Farkas said. “You know, forecasting uses past relationships and projects them forward. And the coronavirus pandemic is an unprecedented event. There’s nothing like it in our modern data that we use for forecasting.”

As reported by the Baltimore Sun,

Treasurer Nancy Kopp, a Democrat, said while it’s good to have “strong” budget numbers, she remains concerned that the economy has hurt low-wage and less-educated workers.