Maryland Gov. Wes Moore is seen here during the State of the State address in Annapolis, Md., on Feb. 7, 2024. (AP Photo/Steve Ruark)
It's a revenue debate playing out in an election year for an open U.S. Senate seat and congressional races, featuring the surprise U.S. Senate candidacy of former Republican Gov. Larry Hogan, who campaigned against tax increases to win his first term in 2014 in the heavily Democratic state and won re-election in 2018.
Moore's proposed budget is more than $1 billion smaller than the last one, due to the absence of federal aid that Maryland, like other states, had received during the COVID-19 pandemic. Still, a large amount of reserves that lawmakers set aside can be tapped to address future holes.
In its work on the spending plan, the Senate had to address a drop in forecasted revenues announced last week for the current fiscal year as well as the next, totaling $255 million. The mistake in the state's Medicaid calculations presented another $236 million challenge.
The Senate decided to authorize the governor to withdraw money from the rainy day fund to ensure Medicaid and foster care are adequately funded.
The budget fully funds the state's ambitious K-12 spending plan known as the Blueprint for Maryland's Future, while challenges remain on how to pay for rising future costs as it is phased in.
Senators also kept Moore's down payment of $90 million to help reach the state's ambitious goal to reduce greenhouse gas emissions, though it's only a one-time expenditure. The money would be used to lease electric school buses, install electric vehicle charging infrastructure and electrify schools and multifamily homes.
The Senate also restored some funding Moore proposed reducing for community and private colleges, a move that brought students to Annapolis to lobby lawmakers.
While the Senate hasn't entertained the kind of revenue increases under consideration in the House, it is considering measures to help raise money for the state's medical trauma system. For example, the Senate is advancing a bill to increase the annual surcharge on vehicle registration fees that support emergency medical services.
Senators also are moving forward with a new tax on firearms and ammunition and are considering a surcharge for electric vehicle registration fees to help make up for gas taxes that their owners don't pay.
Meanwhile, the House appears poised to advance legislation to allow internet gambling, an expansion beyond the state’s brick-and-mortar casinos. There's a similar bill in the Senate, but it's unclear how much support exists for more gambling, which would need to go on the ballot for voter approval if a bill clears the General Assembly.
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The budget, as modified by the Senate, preserves about $1.3 billion in the rainy day fund, which is about 9.4% of general fund revenues. That's well above the 5% that the state routinely kept in the fund before the pandemic.
The House will work on the budget legislation with less than a month to go in the 90-day legislative session. Differences between the two chambers will have to be resolved before the General Assembly adjourns at midnight April 8.
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