Maryland Senate passes budget plan that differs from House, kicking off sprint to Sine Die

ANNAPOLIS, Md. (WBFF) — The Senate passed the budget plans Tuesday after two days of significant debate, sending the proposals to a conference committee to work out the differences with the House’s version.

Republicans argued the tax increases included in both versions are going to hurt middle-class Marylanders, despite some in leadership saying the plan is going to give tax breaks to some 94% of Maryland families.

Here are some of the tax and fee increases included in both versions:

• Increase capital gains tax from to 2%
• Increase cannabis tax to 12%
• Increase sports wagering tax to 20%
• Implement 3% data and IT service tax
• Implement sales tax on precious metal coins and bullion over $1,000
• Implement sales tax on vending machine sales
• Double certificate of title fees
• Accelerate phase-in of vehicle registration fee increase
• Alter definition to historic vehicle to pre-1999 models

During the floor debate, Senate Minority Whip Justin Ready said Maryland families are making tough budgets as well and called on lawmakers not to pass the plan.

“We cannot continue to keep going back to the taxpayers again and again in this state,” he said.

In addition to the tax and fee increases, the budget plan does have more than $2 billion in cuts to state agencies and programs. Sen. Craig Zucker, D-Montgomery County, pushed back on some of the amendments Republicans floated Monday during the debate on the floor.

“No, we can’t cut our way out of this, and we can’t’ budget on a whim,” Sen. Zucker said. “Is this budget perfect? No. No. but we can’t let the perfect be the enemy of the good.

Both plans include a 1% cost of living adjustment for all employees and a salary increment of about 2.5% for employees in barraging units. The plans invests $27.5 million “to make Maryland the capital of quantum,” and $38 million for the Tradepoint Atlantic project.

The House and Senate’s budget plans vary slightly, but here are some key differences:

• House proposes to increase vehicle excise tax from 6% to 6.8%
• Senate proposes to increase vehicle excise tax from 6% to 6.35%
• House includes a rental vehicle excise tax of 3.5%
• House includes a VEIP fee increase
• The Senate includes an increase cap on MVA cost recovery
• Senate includes a new $5 per tire fee at purchase
• Senate eliminates the rental car registration fee discount

The Senate’s budget plan also includes triggers for changes to Medicaid funding as well as other spending plans if there are more federal cuts later in the year, or the state has another revenue write-down.

Senate President Bill Ferguson said the plan represents a “down payment for the future.”

“It represents the world I want to live in,” he said.

While speaking with reporters after the budget votes on the floor, Sen. Ferguson said the news that the Maryland State Department of Education was notified by the U.S. Department of Education that the state would no longer receive $360 million in federal money already committed was a shock.

Given the uncertainty surrounding federal money, even if it’s been committed like the education grants, makes it difficult to provide certainty for agencies and Marylanders, Sen. Ferguson indicated Tuesday.

“I’m pretty worried about what’s going to happen to Maryland’s economy over the next three months,” he said, adding the potential impacts from the car tariffs to the Port of Baltimore and state economy overall.

Everything is on the table, Sen. Ferguson said when asked about a special session.

I “feel less confident that we won’t be back until January,” he added.

Because the House and Senate’s budget plans differ, a conference committee is expected to get underway Wednesday and Thursday; Sen. Ferguson said the goal is to have the budget plan to Gov. Wes Moore’s desk by Friday or Saturday.

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