Annapolis, Maryland (WBFF) —
Maryland Democrat proposes tax changes to include funeral and streaming services.
Proposed by House Majority Leader David Moon, D-Montgomery County, HB 1515 aims to modify the definitions of “taxable price” and “taxable service.”
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Del. Moon is pushing to raise revenue in Maryland despite opposition to state tax increases, as the state faces a $761 million budget shortfall.
Potential Bill Could Lower State Sales Tax Rate Expanding the sales tax to currently exempt categories comes with a trade-off. The bill aims to tax various categories such as funeral services, dry cleaning, and online streaming services.
In 2020, legislation was introduced by Gov. Wes Moore’s current chief of staff, then-Del. Eric Luedtke’s, D-Montgomery County. The attempt was unsuccessful in advancing out of committee following a unanimous, bipartisan negative report.
In 2020, the bill received co-sponsorship from the state’s current treasurer, Dereck Davis. Neither Luedtke nor Davis responded to comment requests on Friday regarding the reintroduction of their previously failed measure.
Del. Moon’s latest plan lacks a designated fiscal estimate, but based on a 2020 legislative report, the previous initiative was projected to bring in around $3.5 billion in additional state tax income.
According to these projections, the typical Maryland household might anticipate a $1,750 rise in their yearly tax payment.
Debate over tax hike aligns with revenue estimates downgrade for FY2024 and FY2025.
Revised estimates show a decrease in incoming tax forecasts for FY2024 and FY2025 by $120 million and $134.9 million respectively from the figures announced in December.
On Friday, Gov. Wes Moore’s spokesperson Carter Elliott, IV placed the blame on former Gov. Larry Hogan for the write-down.
“The revenue trends underscore ongoing issues predating the governor’s inauguration,” Elliot remarked. From day one, we have been committed to enhancing our economy, generating employment opportunities, and attracting new businesses and residents to Maryland.
Hogan retaliated in response to Elliott’s remarks.
Over the course of eight years, we collaborated with our predominantly Democratic legislature to transform a significant deficit into a substantial surplus, all while reducing taxes by $4.7 billion,” Hogan stated.
Upon exiting office in 2022, Hogan bequeathed a $5 billion budget surplus to his successor. Hogan warns that raising taxes would negatively impact residents.
“Marylanders are already feeling the impact of high inflation, and the last thing they want is increased taxes,” Hogan stated. There is a well-defined plan in place to address these financial challenges without increasing taxes.
Is Gov. Moore supporting or advocating for tax hikes to fund the state’s budget? Elliott clarified that the governor’s budget does not include tax increases.
Discussing taxes with the General Assembly will be a challenging task for the governor, with a strong emphasis on implementing financially responsible strategies to boost Maryland’s economy, according to Elliott.
An insider at Governor Moore’s office reveals that his budget proposal does not include any apparent tax hikes. Nevertheless, the proposal involves an extra $3.5 million in revenue from raised fees for the general fund. According to the source, this amount is relatively insignificant when compared to the state’s overall balancing plan.
At that moment, the source refused to give more information on Gov. Moore’s strategy to address the upcoming budget shortfall.
House Minority Leader Jason Buckel, R-Allegany County, criticizes tax expansion proposal
“This insatiable desire for increased taxes and additional revenue to fund unaffordable projects not seen in neighboring states, such as costly new mass transit initiatives and substantial salary hikes for government workers, will ultimately harm Maryland and its residents,” Buckel stated.
Del. Mike Griffith, R-Harford County, expressed concerns similar to Del. Buckel’s, warning that the tax expansion proposal could severely impact Maryland families.
The tax expansion is being proposed as sales tax revenue has decreased due to families facing financial difficulties. This will only add to the burden on the economy,” Del. Griffith stated.
Del. April Miller, R-Frederick County, a member of the Ways and Means committee, stated in an email that she will not support the measure at Monday’s hearing.
Yet, some committee members are not immediately opposed to the proposal. Del. Caylin Young, D-Baltimore City, expressed confidence in the tax measure receiving a fair hearing.
Del. Young emphasized the seriousness of considering a tax expansion. Ensuring a balance between Maryland’s future vision and financial realities is crucial.
Del. Young emphasizes the importance of fully funding the Blueprint for Maryland’s Future, also known as Kirwan.
Investing in education to keep up with changing technology Del. Young emphasizes the importance of a bill aimed at securing Maryland’s financial stability and commitment to fully funding schools.
Since the implementation of Kirwan in 2021, state and local governments have been facing challenges in meeting the education funding initiative’s requirement for a $3.8 billion annual funding increase.
Despite receiving increased funding, numerous local school systems have had to reduce school programs and class sizes to maintain financial stability.
Despite lingering concerns about Kirwan’s sustainability, Governor Moore remains committed to advancing Baltimore’s Red Line project despite a $3.3 billion reduction in the state’s transportation budget. Transportation issues lead governor to tap into Rainy Day Fund for $150 million
In addition, Gov. Moore is proposing an increase of $127 million for local law enforcement funding, $115 million for housing, and $270 million for a childcare scholarship.
Following an announcement on Friday, $13.5 million in grants have been allocated to promote health equity for Maryland residents.
Amidst growing discussions about Annapolis’ financial situation and the General Assembly’s upcoming busy schedule, Del. David Moon declined to respond to inquiries regarding his tax increase proposal on Friday.