1969]                   OF THE HOUSE OF DELEGATES                       97

The latest National economic forecasts are that the leading National
Economic Index, the Gross National Product, will increase from the Calen-
dar Year 1968 total of $865 billion by 7¹/₂% to $932 billion in Calendar
Year 1969 and by 6% to a total of about $985 billion in the Calendar
Year 1970. Some authoritative estimates anticipate a trillion dollar total
for 1970. The 1969 growth of 7¹/₂% reflects mainly the price level rise
with about only 2% real growth. There are predictions that the 6% anti-
cipated growth for 1970 will reflect price rise only, and that there
may be little or no "Real" growth in the economy in that year. These
GNP estimates can be considerably affected by the eventual trends of the
aforementioned variable factors; inflation, construction and National Tax
Reform.

Maryland's rapidly rising population continues to be an important
factor in its revenue growth. Indications are that a total of 4,000,000
inhabitants will be reached by 1971 or 1972.

Dr. Neil Singer, Assistant Professor of Economics of the University
of Maryland, who has been conducting research for the Comptroller on
the possibility of formulating an Econometric Model of Maryland for esti-
mating State revenues, has submitted a preliminary report on his project.
His report notes that if sufficient historical data can be accumulated from
State Income Tax returns on personal incomes by categories and bracket
sizes, that a model can be gradually built up over a period of years. Steps
are now being taken in conjunction with the Income Tax and Data Process-
ing Divisions of the Comptroller's Office towards the accumulation of such
a data bank. This model would serve both as an aid in estimating the
effect of changes in tax structure as well as the regular estimating of
revenues from the existing tax structure.

Although leading economists are now forecasting some slowdown in
the economy by 1970, there are no very definite signs that this is as yet
occurring in Maryland. However, if such developments do occur in Mary-
land, a re-appraisal of the estimates in this report may be necessary later.

Following is the Board's current projection of actual State revenues
for the Fiscal Year Ended June 30, 1969 into the Fiscal Years 1970 and
1971.

		Special,
	General	Federal
	Fund	Funds, Etc.	Total
		$ Thousand
Fiscal Year 1969—Actual ............................ Fiscal Year 1970—Revised Estimate.......... Fiscal Year 1971—Estimate...........................	664,943 862,971	441,861 500,948	1,106,804 1,363,919

Attached is a detailed analysis of these revenues.