Lawmakers in Maryland have passed a $63 billion budget, which includes tax and fee increases to fund transportation and education initiatives. Governor Wes Moore, a Democrat, had submitted a balanced budget without tax increases, but the General Assembly made adjustments to include additional revenues. The budget bill, along with a reconciliation measure, received final approval from both the House and Senate on Friday. The new transportation-related fees, such as a 75 cents per trip fee on ride-hailing services, are expected to raise about $252 million during the budget year.
In addition to the transportation fees, the budget legislation includes increases in vehicle registration fees and surcharges on electric vehicles to help cover costs for the state’s emergency trauma system and make up for gas tax revenues. Various tobacco tax increases, including an extra $1.25 on a pack of cigarettes, will contribute about $91 million towards K-12 education funding. These revenues are aimed at supporting the Blueprint for Maryland’s Future, which seeks to expand early childhood education, raise teacher salaries, and provide assistance to struggling schools. Democratic Senator Guy Guzzone emphasized the importance of raising revenues to cover these costs in an efficient and responsible manner.
Differences between the House and Senate regarding the amount of new revenues led to delays in passing the state’s spending plan. The House had proposed a $1.3 billion plan to address projected education costs and transportation funding shortfalls, which included various tax and fee increases, corporate tax reform, and the legalization of internet gambling. However, the Senate mostly rejected these proposals and focused on finding a middle ground during negotiations. Ultimately, the final budget legislation approved on Friday includes some new revenues, but not as much as initially proposed by the House.
The revenue debate comes at a critical time, as the state is gearing up for an election year with an open U.S. Senate seat and congressional races. Former Republican Governor Larry Hogan has entered the race for the U.S. Senate, campaigning against tax increases. Hogan previously won two terms as governor by appealing to voters in the heavily Democratic state with promises to lower taxes. The budget discussions reflect the ongoing challenge of balancing revenue needs with the demands for funding critical transportation and education initiatives in Maryland.
