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Transcript of Economic Chat with Comptroller Franchot - 07/16/2009

Session (Talk Economy with the Comptroller) Transcript

Comptroller Franchot: Good morning and welcome to our online chat! Thanks to all of you for taking time to join this informal discussion about Maryland's ongoing economic and fiscal challenges, and their effect on families and businesses through the State.

Comptroller Franchot: In these tough times, I believe it's more important than ever that our elected officials speak candidly with people about the hard work and tough choices that still lie ahead. By working together in true partnership, I'm confident that Maryland will come out of this a stronger and healthier State. Again, thanks for participating -- let's get to work!

Comptroller Franchot: Any questions out there?

Chat Moderator: Thanks for the questions, they are pouring in so please be patient and the answers will come.

Comptroller Franchot: Go to www.marylandtaxes.gov and click on Maryland Money - it is under the category "Where the Money comes from". There are other reports in addition to the sales tax collection figures which detail how revenues are generated and how they are spent. Good luck.

Chat Moderator: We will do our best to answer all the questions we get during the live chat, however, if we run out of time, please send your questions to AsktheComptroller@comp.state.md.us

Comptroller Franchot: The first question was from Tim who asked if there was a place on the Web where taxpayers can see monthly sales tax reports. We will include the question asked from here on.

Liam Farrell: Comptroller, this is Liam Farrell with The Capital. With the latest revenue numbers,how dire do you believe the situation will be in the coming months? Do you foresee a large writedown in August?

Comptroller Franchot: Liam, Welcome to the chat! The September 17th report from the Board of Revenue Estimates will likely include a substantial revenue writedown because the economy is a mess and continues to deteriorate. The national economic recession is still savaging our state economy and revenues.

Alsuderman: ARe you concerned about the state's finances after the stimulus money runs out?

Comptroller Franchot: w

Alsuderman: ARe you concerned about the state's finances after the stimulus money runs out?

Comptroller Franchot: One of the concerns I have repeatedly raised is that federal stimulus money while important is being used to patch holes in the state budget. We have a 2 billion dollar deficit in Maryland and one time stimulus money is not the long term answer.

Ed Kimmel: I'm a bankruptcy attorney. I rarely, if ever, see the State of Maryland actively participating in my Chapter 11 or Chapter 13 cases. My assumption is that you only have the staffing for the enormous cases. Is this correct?

Comptroller Franchot: Ed, Thanks for the question. We receive bankruptcy filings from the Court. We review them all for tax liabilities and when one is found, we file a claim with the bankruptcy court. What do you see in the economy? What impact are you seeing on your clients?

Chat Moderator: These are good, thoughtful questions that deserve thoughtful responses. Thanks for your patience.

Ed Kimmel: How much is the recession hurting our tax collections?

Comptroller Franchot: We are seeing a record drop in revenues across the board. Today my office released new revenue figures that show steep declines in estimated income tax payments, corporate receipts, and almost every other revenue source. Next week, the Governor is expected to bring $700 million dollars in budget cuts to the Board of Public Works. Maryland is not immune from the national recession, but business as usual is not sustainable. For more informatiion go on line and surf our new website.

Tim: Is the $2bill deficit you reference for fiscal year 2010 ?

Comptroller Franchot: That applies to the FY 2011 budget, which the governor and legislature will work on starting in January.

Jose: Money is tight everywhere. How much did it cost to revamp your website?

Comptroller Franchot: Jose, Good question. The revamp was done in house, with existing staff and resources. Like families and businesses across Maryland, we are tightening our belts in the Comptroller's office and working creatively to do more with less. What do you think of the new site? And what do you think about learning to live within our means as a state?

Don: There are two primary ways to reduce the shortfall if the economy does not improve, reduce services or raise taxes. What is the most likely scenario? Don

Comptroller Franchot: Don, We need a top to bottom review of state spending and we need a moratorium on new taxes while the recession is ongoing. We should focus our investment on the technology sector which will eventually lead our state out of the recession.

vivdell: I thought our state has to have a balanced budget each year

Comptroller Franchot: The governor has to propose a balanced budget and the legislature has to adopt a balanced budget. Nonetheless, we have a 2 billion dollar gap between state revenues and state spending obligations. In recent years we have balanced our budgets with stimulus money and other one time revenue sources, but that is not sustainable given the Great Recession.

Chat Moderator: We will do our best to answer all the questions we get during the live chat, however, if we run out of time, please send your questions to AsktheComptroller@comp.state.md.us

WC Democrats: What is the state of Maryland doing about the current budget shortfalls? And how is the current Administration helping state and local governments weather the economic storm?

Comptroller Franchot: Maryland is fortunate to have the Board of Public Works which can make real time adjustments to state spending when revenues collapse. The Governor and the General Assembly have already made many difficult choices in their effort to ride out this economic storm. More difficult choices face us and my office is ready to play a constructive role through better tax compliance and economic analysis.

Alsuderman: What are the long-term forecasts for the state's economy/finances?

Comptroller Franchot: The economic bones of the state are strong but we have a long way to go. Unemployment is up as are home foreclosures and more bad news is on the way. People are scared of losing their homes, their jobs, and their life savings. That fear is affecting consumer confidence which hurts every sector of the economy.

Chat Moderator: We will do our best to answer all the questions we get during the live chat, however, if we run out of time, please send your questions to AsktheComptroller@comp.state.md.us

Scott77: I heard something about possible state layoffs. How do we avoid them?

Comptroller Franchot: While we are expecting deep budget cuts from the Governor, it is premature to speculate on what will be included in the package. But just like Maryland families and businesses, Maryland state government will have to tighten its belt and learn how to do more with less.

rose: What's are some of the new features on your web site?

Comptroller Franchot: The Spotlight on Maryland web site we just put up features a plain english explanation of how taxpayer dollars are spent and how those expenditures benefit them. Go on the site and use the tax receipt calculator and see where YOUR tax payment went this year. Explore the site; we believe it is a new approach to fiscal transparency.

Tim: Comptroller... the storm that WC Democrats speaks of will not be a thunderstorm of short duration I believe... hopefully the decison makers will not seek short term solutions and continue to face this dilemma year after year - A long term approach to reduced spending is required

Comptroller Franchot: Tim, I agree. This recession gives us an opportunity to rethink our State's entire approach to fiscal management.. We should look for ways to eliminate wasteful spending, operate more efficiently, and build our knowledge based economy by investing in sustainable industries like information technology and the life sciences. We need input from business, labor, and private citizens. We need a comprehensive top to bottom scrubbing of state spending as a first step along with a halt to any new taxes during this downturn.

Chat Moderator: Just a reminder, we have only five minutes left. The Comptroller is doing his best to get to as many questions as possible. These are great questions.

ChrisR: Why does our current system of predicting revenues repeatedly lead us to underestimating the necessary cuts? We repeatedly have to go through new rounds of cuts because we don't get it right the first time. Why does this happen?

Comptroller Franchot: Chris R. Thanks for the question. The underlying problem is the national recession. It is truely unprecedented in its depth and scope.

Scott77: I hear from a lot of people that we're in better shape in Maryland than other states like California, largely because of the Governor making some pretty unpopular choices like taxes. What are your thoughts on what the Governor has done?

Comptroller Franchot: Scott, Thanks for the question. No matter how bad things are in Maryland, we always have California to make us feel better. Nonetheless, we have a real fiscal crisis in Maryland. The Governor is making tough choices as we speak. While we are not out of the woods and face several years of rebuilding, we are fortunate in Maryland to have really strong economic bones, a well educated workforce, and all the advantages of proximity to the Federal Government.

Comptroller Franchot: Thank you all for joining us for this virtual town meeting on the economy. Contact my office if you have follow-up questions.

Chat Moderator: I want to thank Comptroller Franchot and everyone who participated in the chat today. We will try to do more of these as we move forward to keep Marylanders informed and in touch with the Comptroller. If we didn't get to your question this morning please send it to AsktheComptroller@comp.state.md.us. Thanks and have a great day.

Chat Moderator: Today's transcript will be available online later today.



 
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