Maryland House approves budget plan with tax and fee increases

ANNAPOLIS, Md. (WBFF) -- — With less than three weeks left in the General Assembly session this year, the House of Delegates approved its budget and funding mechanism companion legislation Thursday after a lengthy debate, teeing up negotiations to begin with lawmakers in the Senate.

The $63 billion budget from the House is similar to the version that came out of the Senate already, however, the biggest difference centers around the $1.3 billion tax increase and gaming expansion plan included in the House legislation.

Future budget deficits are central to the tax hike proposal proposed by House Democrats, led by Speaker Adrienne Jones. That plan includes approximately $900 million in taxes and fees, including changes to the sales tax exemption for vehicles traded into the dealer, electric vehicle surcharges, registration fee increases for certain vehicles, and an increase of the excise tax for vehicles from 6% to 6.5%.

Projections for the Transportation Trust Fund call for more than $3 billion deficit in the coming six years; that does not include the overall budget deficit projected to hit $3 billion in budget year 2028.

The House’s legislation also includes a proposal to expand iGaming in Maryland – allowing casino-style games to be played on cell phones and other electronic devices. The plan could bring in an estimated $300 million for the state.

The funding in the House’s Budget Reconciliation and Financing Act of 2024, or BRFA, would go toward funding the Blueprint for Maryland’s Future – the multi-billion dollar, decades-long education spending plan lawmakers approved in a previous session – and the Transportation Trust Fund.

“We’ve put our best foot forward to try not to put broad tax and fee increases on the table,” said Del. David Moon, D-Montgomery County. “Everything is surgically aligned with a very specific reason.”

However, several lawmakers lamented on the House floor Thursday before votes were cast about funding mass transit projects across the state.

“We have serious and grave concerns about doing so on the backs of middle-class folks,” said House Minority Leader Jason Buckel, a Republican from Allegany County.

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In Baltimore City, millions of rides are taken using mass transit systems annually, according to Del. Mark Edelson, D-Baltimore City. In 2023, 3.4 million rides were recorded on the light rail, 4.2 million rides on the Baltimore metro, over 20 million rides on core bus services, and nearly 50% of toll revenues were generated in toll facilities in Baltimore, Del. Edelson said.

When I look at this document [the BFRA], I see the investments reflected in our people and infrastructure to move this state forward,” he said. “For anybody else with concerns, we have to fund our system; we have to fund our roads and bridges and highways.”

“What [Marylanders] can’t afford is for us not to make the investments in our children and in our future,” Del. Edelson added.

While most Republican lawmakers voted against the BRFA, Del. Ric Metzgar of Baltimore County voted in support of the plan. He described the vote as “the hardest” he’s had to take in a decade, but said the funding is critical to infrastructure projects in his district.

“I stand because I’m looking at our roads and infrastructure and our school system, but I felt it was very important to take that vote,” Del. Metzgar said. “We have kicked this can so many times. How many times are we going to kick the can and not fix it?”

When asked if he’s concerned about the impact on Marylander’s wallets, Del. Metzgar dismissed the idea. Rather, he said, he didn’t think the impact would be that great for Marylanders.

That view was not consistent with other members in his caucus. Del. Robin Grammer, R-Baltimore County, said lawmakers were clear at the start of session about not wanting to raise taxes, but yet, that appears to have changed.

“I don’t think this is in step with growing middle class in this state and it’s not in step with what voters want,” Del. Grammer said.

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Del. Ben Barnes, a Democrat representing Anne Arundel and Prince George’s Counties as well as chair of the Appropriations Committee, acknowledged the difficult vote for some lawmakers while speaking on the floor before the final vote. But ultimately, he said, the price of not making the investments is too great.

“What would be harder would be turning our backs on yet another generation of children,” Del. Barnes said. “What would be harder is explain to families why they are stuck in traffic.”

Gov. Wes Moore has said throughout the entire session that there is “a high bar” for him to consider tax increases; though it’s unclear exactly what would be necessary for a proposal to meet that bar.

Senate President Bill Ferguson, a Democrat from Baltimore City, raised some concerns about using tolls to fund other transportation projects around the state.

“Raising tolls for other purposes is more challenging,” Sen. Ferguson said Tuesday. “If the goal is to cover the overage, $400 million of the Purple Line, I can’t go back to Baltimoreans and say increased toll prices are going be used to fund things you won’t use very often.”

Sen. Ferguson has also been dismissive of iGaming in Maryland. So, as of now, it’s unclear what the compromise plan will be moving forward for lawmakers. Those details will likely be hashed out in a conference committee.

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