Annapolis, Maryland — The Maryland House approved budget measures on Thursday that included tax and fee increases as part of a $1.3 billion revenue plan for roads and education.
The decision clears the way for negotiations to begin next week with the Senate, which has been resistant to the House’s tax, fee, and toll ideas in the $63 billion budget plan for the coming fiscal year.
Del. David Moon, a Montgomery County Democrat, stated that the expenditures are necessary to restore economic competitiveness and recruit and retain businesses by modernizing transit and roads and increasing child care.
“We’ve put our best foot forward to try not to put broad tax and fee increases on the table,” the House majority leader added. “Everything is surgically aligned with a very specific reason.”
Opponents argue that the ideas will overburden taxpayers.
“We want to continue to work together as one Maryland to advance policies that will help us meet our budgetary needs, but we have serious and grave concerns about doing so on the backs of middle class folks buying, trading in, registering vehicles that they need to use to be able to get to work, to get to the hospital, to take their kids to school,” said Del. Jason Buckel, a Republican from northern Maryland who is the minority leader in the House of Delegates.
The House approved the state budget 121-9. Opposition increased for a companion plan that works in tandem to balance the state’s accounts and contains the tax and fee increases, which the House incorporated into the proposal. The House approved the budget reconciliation bill 89-45.
It would increase the car excise tax from 6% to 6.5 percent. It would also limit the vehicle trade-in exemption to vehicles that are zero-emissions or hybrids. It would also collect income by modifying car registration prices to reflect new weight categories and introducing a 75-cent statewide ride-sharing fee.
The House plan includes a tax adjustment for firms called combined reporting. It forces huge business subsidiaries to aggregate their profits together, prohibiting multistate corporations from dodging taxes. This provision’s revenues would help pay for the state’s rising K-12 education costs, known as the Blueprint for Maryland’s Future.
The program, authorized in 2020, gradually increases funding for early childhood education, raises teacher pay, and helps struggling schools.
“This includes a commitment to providing students and families with the support they require through our community schools,” said Del. Vanessa Atterbeary, a Howard County Democrat who chairs the House Ways and Means Committee. “This is not an easy task, and it’s not an inexpensive task, but it’s a promise we made to the children in our state.”
Separate legislation has already been enacted in the House to earn $75 million per year for transportation through tolls over the next decade.
Delegates also passed a separate bill that would legalize online gambling to help pay for education. It would require a constitutional amendment.
However, the majority of these plans are opposed in the Senate, where leaders have stated that their plan currently funds the budget for the coming fiscal year. Senators have stated that, given the state’s substantial assets, they would prefer to wait and establish a more deliberate plan to pay for rising blueprint expenses.
Senate President Bill Ferguson told reporters this week that internet gambling and combined reporting were “hard no”s this year.
“Those are not issues we will be addressing this year,” Ferguson, a Baltimore Democrat, said.
The tax and fee elements included by the House to the budget reconciliation package have yet to get Senate approval.