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Budget Secretary T. Eloise Foster called the drop "relatively modest" and can be covered by the state's fund balance — money set aside to cover small emergencies. Fiscal 2010 ends June 30.

The board meets three times a year to estimate upcoming tax collections. The governor and lawmakers use the board's numbers to draw up spending plans.

Foster said this is the first time in three years the March figures have not been revised downward drastically to reflect a deteriorating economy.

But Comptroller Peter V.R. Franchot (D) remained pessimistic about the state of the economy because of the fragile job market and the soft housing market. He said the commercial real estate market is poised for a correction if not an outright collapse.

"Eventually, there's going to be a recovery. The trouble is, it's not going to come anytime soon," he said.

Foster and Franchot are members of the board, as is Treasurer Nancy K. Kopp (D).

The board's estimate for the 2011 budget year remained unchanged at nearly $12.7 billion. Lawmakers must pass a balanced budget for 2011 before the 90-day General Assembly session ends April 12.

Foster said the fall in revenue could be attributed to the snowstorms in December and February. The state noted drop-offs in consumer spending and lottery sales, she said.

Gov. Martin O'Malley (D) has proposed a $13.2 billion budget. Republicans have proposed a series of cuts as a hedge against future troubles in the economy.

The board looks at a range of taxes, such as income, sales and corporate levies. The state budget includes other collections not covered by the board's estimates.