New Revenue Estimates for Next Fiscal Year Are In: Hogan’s Heavy Cuts Would Have Been Unnecessary

New Revenue Estimates for Next Fiscal Year Are Up: Hogan’s Heavy Cuts Would Have Been Unnecessary

On July 1, Governor Hogan threatened to implement an across the board 5% pay cut, significant cuts to filled and vacant positions and an increase in the cost of health insurance. AFSCME refused to agree to these drastic and unnecessary cuts, organized to convince the Board of Public Works to vote down these cuts and has continued to vigilantly defend the rights of frontline employees in the workplace, in the budget and in Annapolis.

Months later, new revenue estimates have come out proving that the Governor was attempting to unnecessarily cut frontline employees. On Tuesday, September 29 the Board of Revenue Estimates (made up of the State Treasurer, State Comptroller and the Secretary of Budget & Management) met to receive, discuss and ultimately approve new state revenue projections for Fiscal Year (FY) 2021 and FY2022 that significantly exceeded expectations. 

After predicting our economy was imminently on the verge of collapse in July without drastic cuts, revenues for the next fiscal year are projected to be $1.4 billion higher than was originally estimated. AFSCME and our allies made clear that these types of cuts were absolutely preemptive and unnecessary given the unclear revenue projects, significant savings in the Rainy Day Fund and the potential for additional federal stimulus.

AFSCME and our allies will continue to fight against all budget cuts to frontline workers given the unclear economic picture, including protecting the 2% COLA negotiated in our MOU for January 2021. We will also continue to urge the Governor to utilize all available funding before cutting frontline workers including the Rainy Day Fund and other revenue raising measures we will update you on next week.  

After predicting our economy would collapse at the beginning of the pandemic, revenues for FY21 are projected to be $1.4 billion higher than was originally estimated back in May. FY22 is projected to be $2.1 billion higher.

Many factors came into play which helped mitigate the worst:

  • Maryland’s labor market was hit hard, but has been better than anticipated;
  • The direct stimulus payments helped keep people on their feet financially;
  • Money for businesses from the Paycheck Protection Program kept many from going under; and
  • The additional $600 in unemployment insurance payments (when the Department of Labor’s claims system worked) helped many – especially lower income Marylanders – stay afloat.

Despite the revenue projections, we know the coronavirus continues to ravage our communities and our economy. We still don’t know if more federal aid will be coming or how the upcoming Presidential election will impact our country’s economic stability in the long term. With the potential for a second outbreak looming this winter, it is more important now than ever that our union stand strong and together. We are fighting to protect the vital work frontline workers do containing the spread in hot spots and helping our neighbors and community members recover from this unprecedented economic crisis.