The state of Maryland has $1.12 billion left over in its accounts now that the books are closed on the government’s most recent budget year.
Comptroller Peter Franchot announced the surplus — officially known as the “unassigned balance” of the state’s general fund — on Wednesday.
The state’s 2022 budget year, which ran from July 1, 2021 through June 30, 2022, initially had just shy of $5.5 billion extra. But, anticipating a surplus, much of that money was spoken for by state lawmakers in the 2023 budget, bringing the surplus down to $1.99 billion.
Then $500 million was assigned to the state’s rainy day funds and $370 million was sent to the fiscal responsibility fund to pay for certain expenses, including negotiated state employee raises, leaving the surplus at $1.12 billion.
The surplus is smaller than the one a year ago, which was $2.5 billion.
Why does the state have extra money?
According to a report generated by the comptroller’s office, the state had more money coming into its accounts than expected, including from personal income taxes, corporate income taxes and the sales tax.
Franchot, a Democrat, warned during a meeting of the state Board of Public Works on Wednesday that the state should not get used to having extra money in the bank, given ongoing inflation increases and changing federal financial policies.
“Future governors and legislators should not bank on billion-dollar surpluses to be the norm in the future,” Franchot said.
He advised it would be “imprudent” to spend the money.
Republican Lt. Gov. Boyd Rutherford, sitting in for the traveling Gov. Larry Hogan, agreed.
”They should not go hog-wild on the spending … because we don’t know what’s going to happen and there are some projecting we will see a downturn in the coming years.
State workers were glad that some of the extra money will go to their paychecks, according to leaders of the American Federation of State, County and Municipal Employees Maryland Council 3, the largest union for state employees.
“This additional money will put the state closer to paying all state employees a sustainable and living wage that honors the essential work they do and helps them put food on the table, pay outstanding bills and live in the communities they serve,” AFSCME Council 3 President Patrick Moran said in a statement.