Maryland House pushes higher taxes, online gambling in $1.3B plan for education and transportation

ANNAPOLIS, Md. (AP) — A budget showdown at the Maryland General Assembly is brewing, with top House leaders outlining on Friday a $1.3 billion plan for new state revenues to pay future education and transportation costs that Senate leaders think is too hefty now and unsuitable for the state’s current economic climate.

The House’s revenue package includes tax, fee and toll increases, as well as the legalization of internet gambling, which would make casino games available for wagering online.

House Speaker Adrienne Jones, a Baltimore County Democrat, kicked off a news conference with top Democrats who control the chamber by saying, “We can no longer rely on quick fixes or short-term approaches.”

“They will only land us right back in the same place next year,” Jones said. “At this point, we know what the solution is, and it’s finally time that we just say it. The answer is revenues.”

The plan is targeting the rising costs of the state’s K-12 education funding plan known as the Blueprint for Maryland’s Future. The blueprint, approved in 2020, phases in larger amounts of money to expand early childhood education, increase teachers’ salaries, and provide aid to struggling schools.

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While the budget approved by the Senate fully funds the blueprint for the next fiscal year, the state has yet to find the answer to rising costs in the years after that.

The House plan attempts to solve that with revenue from internet gambling. However, gambling expansion would require a constitutional amendment, which needs a three-fifths vote in each chamber and approval by voters in November. Corporate tax reform is also part of the plan to help fund the blueprint.

The House plan also aims to address the state’s transportation funding woes by raising the vehicle excise tax from 6% to 6.5% and adjusting a vehicle trade-in exemption to apply only when a vehicle is traded in for a zero-emissions or hybrid vehicle.

It also would raise revenues by changing vehicle registration fees, based on new weight classifications, and imposing a statewide ride-sharing fee of 75 cents.

More money from tolls also is part of the plan.

“They haven’t gone up for 10 years, and they were reduced for political reasons during the previous administration,” said Del. Marc Korman, a Montgomery County Democrat who chairs the House Environment and Transportation Committee.

So far, neither the Senate nor the governor have appeared supportive of the House’s proposal. The $63 billion spending plan submitted by the governor and approved by the Senate Thursday night balances the budget, with a large rainy day fund remaining.

“To the hardworking Marylanders out there who are feeling the challenges of stubborn inflation, we do not want you to bear additional burden,” Senate President Bill Ferguson, a Baltimore Democrat, said Friday.

Gov. Wes Moore, a Democrat who submitted his budget plan in January without tax increases, remained wary of backing them now.

“Any conversation with the General Assembly around taxes is going to have a very high bar for the governor, and any of those conversations will focus on creating fiscally disciplined ways of making Maryland’s economy grow,” said Carter Elliott, the governor’s spokesman.

But Del. Ben Barnes, who chairs the House Appropriations Committee, said the state’s current budget isn’t sustainable enough to meet the needs identified as priorities by the governor, the Senate and the House.

“We are facing a high bar. We are facing shortfalls in our Transportation Trust Fund that are not sustainable, so we believe we’ve met the high bar,” Barnes, a Prince George’s County Democrat, said.

House changes to the state’s budget legislation for the next fiscal year have to be worked out with the Senate before the General Assembly adjourns April 8 at midnight.

The two chambers already appear to have near agreement on some new revenue to help pay for the rising costs of the state’s medical trauma system. Both are advancing measures to increase revenues from vehicle registration fees that support emergency services. The House and Senate also are advancing bills to tax guns and ammunition to help pay for emergency services needed for gunshot patients.