WBAL.com

Maryland general fund revenues were $73.5 million below forecasts for fiscal year 2008, according to final numbers released by the comptroller’s office on Thursday.

Individual income taxes, the sales tax and the tobacco tax were $140 million short of expectations for the fiscal year that ended June 30.

“My office is currently hard at work preparing next year’s revenue estimates, but it is safe to say that in the current economic climate, we’re in for more bad news,” Comptroller Peter Franchot said in a statement.

Franchot’s statement also said that “whatever happens in November, we will still have a significant budgetary shortfall. Some have estimated it to be as much as $1 billion.”

November sees Maryland voters decide on a constitutional amendment which would allow legal slot machines, a move Franchot has opposed. In his statement, the Comptroller said that slots “won’t solve our fiscal problems; in fact they will only make them worse.”

Individual income tax revenues increased 3.9 percent to $6.9 billion, $46.3 million below expectations.

Sales tax collections went up 7.5 percent to $3.7 billion, but they were $76.5 million less than the forecast. If the sales tax rate had not been increased from 5 to 6 percent in November’s special session, receipts would have been flat – the worst performance since 1991, the report said.

Corporate income tax collections dropped 6.5 percent to $551.7 million – $7.1 million lower than expected. However, David Roose, the state’s director of the Bureau of Revenue Estimates, wrote that the “good news is that the bad news may be in the past” for the corporate income tax revenue.

That’s because estimated corporate income tax payments reflecting current activity went up 10.8 percent. Estimated payments for tax year 2008 activity alone grew 32.3 percent, though boosted in part by the rate increase from 7 to 8.25 percent during the special session.

“The decline in net collections was a result of substantial growth in corporate income tax refunds, which largely reflect prior years’ activity,” Roose wrote.