Maryland House Passes 63B Budget With Divisive 1.3B Tax Hike Plan

With the 2024 legislative session nearing its end, the Maryland House of Delegates approved its $63 billion budget proposal and a controversial funding mechanism on Thursday after extended debate. This move sets the stage for negotiations with the Senate, as lawmakers grapple with addressing future budget deficits.

While the House budget closely resembles the version passed by the Senate, the most significant point of contention revolves around the $1.3 billion tax increase and gaming expansion plan included in the House legislation.

House Democrats, led by Speaker Adrienne Jones, have proposed the tax hike to tackle looming budget shortfalls. The plan encompasses approximately $900 million in taxes and fees, including changes to vehicle trade-in sales tax exemptions, electric vehicle surcharges, registration fee hikes for certain vehicles, and an increase in the vehicle excise tax from 6% to 6.5%.

Projections indicate a potential 3 billion deficit in the Transportation Trust Fund over the next six years, compounded by an overall budget deficit projected for each 3 billion by the 2028 fiscal year.

Additionally, the House legislation proposes expanding iGaming in Maryland, allowing casino-style games to be played on cell phones and electronic devices, potentially generating an estimated $300 million for the state.

The funding from the House’s Budget Reconciliation and Financing Act of 2024 (BRFA) would support the Blueprint for Maryland’s Future, a multi-billion dollar, decades-long education spending plan, and the Transportation Trust Fund.

Defending the proposal, Delegate David Moon, D-Montgomery County, stated, “We’ve put our best foot forward to try not to put broad tax and fee increases on the table. Everything is surgically aligned with a very specific reason.”

However, the plan faced opposition from several lawmakers, who expressed concerns about burdening middle-class residents to fund mass transit projects across the state. House Minority Leader Jason Buckel, R-Allegany County, said, “We have serious and grave concerns about doing so on the backs of middle-class folks.”

Delegate Mark Edelson, D-Baltimore City, highlighted the importance of investing in infrastructure and education, stating, “For anybody else with concerns, we have to fund our system; we have to fund our roads and bridges and highways.” He added, “What [Marylanders] can’t afford is for us not to make the investments in our children and in our future.”

While most Republican lawmakers opposed the BRFA, Delegate Ric Metzgar of Baltimore County voted in support, describing it as “the hardest” vote he’s taken in a decade but crucial for infrastructure projects in his district.

Governor Wes Moore has maintained a “high bar” for considering tax increases, though the exact criteria remain unclear.

Senate President Bill Ferguson, D-Baltimore City, raised concerns about using tolls to fund transportation projects statewide, stating, “Raising tolls for other purposes is more challenging.”

With differing perspectives on tax increases and gaming expansion, the compromise plan will likely be hammered out in a conference committee as lawmakers work to reach a consensus before the session’s end.