As the General Assembly session moves into its final two weeks, the House and Senate must hash out the differences in their spending plans. The Senate, who approved its $63.1 billion version of the budget two weeks ago, used larger than expected capital gains taxes to offset the recent revenue write down, covered a $236 million miscalculation in Medicaid expenses by providing authority to utilize the state’s rainy day fund, and did not incorporate any revenue enhancing proposals. The similar in size House spending plan, which was approved last week, incorporates $1.3 billion in revenue enhancement proposals through the Budget Reconciliation and Financing Act to address near and longer term shortfalls. Revenue enhancement proposals include several transportation related fees and combined reporting. The House has also passed legislation to expand gaming in Maryland to include internet gaming or iGaming.
As negotiations are set to begin, the Senate and House have staked out their positions on the budget and increasing revenues.
“We’ve been clear on what the Senate’s position was for months. Nothing changed on our end,” Senate President Bill Ferguson said. “I think that we’ve had cordial conversations. We’re in a different position on sort of the ideology around taxation when you don’t need it in the moment. And so, we’ll see.”
The senate has been in favor of some new revenues such as fee increases to benefit the state’s suicide and crisis lifeline as well as new registration surcharges on electric and hybrid vehicles. These surcharges bring hybrid and electric owners more in line with gas powered drivers and were recommended by the Transportation Revenue and Infrastructure Needs Commission to benefit the state’s Transportation Trust Fund.
The House has a plan to call for the Maryland Transportation Authority to disburse $75 million annually over 10 years to the trust fund to help pay for the construction of the Intercounty Connector toll road. Additionally, the Senate has shown some willingness to accept the House plan to impose a fee on ride share services. However, Senate President Bill Ferguson has been strongly against the House plan to impose a worldwide combined corporate tax reporting requirement.
“I think the entire package we’re sending over is doable,” said House Appropriations Chair Ben Barnes. “I think when we sit down to negotiate with the Senate, we’ll put everything on the table for them. We certainly understand that the House is not unicameral. We don’t get to make all the decisions. I think the Senate understands that as well. I think that we’ll have to sit down and reach a compromise, but any compromise would have to have real solutions, from our perspective.”
Budget analysts have warned of the growing budget deficit that is expected to hit $1 billion by 2026 and $3 billion by 2028 largely due to the Blueprint for Maryland’s Future education reform effort. There are also some large estimated shortfalls in the Transportation Trust Fund. House leaders are eager to find new revenues now while the Senate sees the need for a more gradual year-to-year approach that does not jeopardize the state’s competitiveness and growth.
Maryland Matters: Ferguson still a no on broad-based taxes but leaves room for negotiation
Maryland Matters: House, Senate to hammer out budget in conference committee
Report of the House Appropriations Committee to the Maryland House of Delegates
