Maryland Dems worry planned tax hike carries dire consequence: Sen. Larry Hogan

Some Maryland Democrats worry that a legislative push for a nine-figure tax hike may bolster Republican former Gov. Larry Hogan's bid to flip one of the state's U.S. Senate seats.

Then-Maryland Gov. Larry Hogan speaks at the Maryland statehouse, Jan. 10, 2023, in Annapolis, Md. (AP Photo/Julio Cortez, File)

Nevertheless, some Democrats question whether now is the time for a package of tax and fee increases proposed by the state's House of Delegates to pay for transportation and K-12 education, when lawmakers could wait a year and defer potential political blowback.

"It is something that is a factor in the decision-making process for the next year," Ferguson said. "The makeup of the U.S. Senate will matter for the long-term investment future for Maryland."

With strong majorities in both the the state House and Senate, and a 2-1 advantage in statewide voter registration, Maryland Democrats typically don’t have to worry much about the GOP in the state capital. But Hogan is a rare Maryland Republican who has won two statewide races. That's something neither of his likely Democratic opponents, including U.S. Rep. David Trone and Prince George's County Executive Angela Alsobrooks, has done.

Gov. Wes Moore, a Democrat, submitted a balanced $63 billion budget for the next fiscal year in January without tax increases, and he has said raising taxes would face "a very, very high bar" this year.

The Maryland Senate this month largely kept his budget plan intact, despite a drop in revenue estimates announced after the governor submitted his plan. But the House has changed budget legislation to include new revenues, relying on a variety of transportation-related user fees and corporate tax reform for much of it. The Senate has been mostly unreceptive to the House plan, with Ferguson ruling out the corporate tax component. He's also ruled out legalizing internet gambling this year, another part of the House plan.

Senators negotiating with House members have expressed willingness to raise about $250 million in revenues, but the House negotiators have said that's not enough. With differences still unresolved and less than a week left in the session, Moore issued an executive order Monday night to extend the session by 10 days, if needed beyond Monday's scheduled adjournment at midnight.

In December, the state's transportation secretary proposed roughly $3.3 billion in cuts for Maryland's six-year transportation spending plan, as inflationary pressures add to the problem as well as the fact that traditional revenue sources haven't kept up with costs.

Ferguson said the budget plan approved in the Senate invests in the state's priorities without tax increases, with ample reserves still in the rainy day fund to avoid a hurried approach to revenues. He also noted that the bridge collapse has only underscored the need to keep a Democratic majority in the Senate.

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"This is about the long-term future of the state, and that is the political reality that we have to operate within," Ferguson said.

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