Senate committee sends budget package to the floor without taxes

Senate leaders Friday said Maryland’s fiscal 2025 budget will continue to protect key priorities without the need for tax increases.

The Senate Budget and Taxation Committee finished work on a $63.1 billion budget proposed earlier this year by Gov. Wes Moore (D). The revised spending plan is expected to be before the Senate with a final vote next week.

Senate President Bill Ferguson (D-Baltimore City) said revenue write-downs announced a day earlier will not require raising taxes this year.

Maryland Senate President Bill Ferguson (D-Baltimore City). Photo by Bryan P. Sears.

“We had news about a small write-down from the projections that we had received in December,” Ferguson told reporters. “The overall message is that revenue is still increasing in the state of Maryland. It is not increasing at the pace as our economy is growing, which is something that we’re going to have to tackle in the years ahead. But right now, the state of the economy in Maryland and the state of the budget is still strong.”

“What I know is we don’t need taxes right now in this budget to balance it and to invest in our priorities,” he said.

Senate Budget and Taxation Committee Chair Guy Guzzone (D-Howard) said the Senate’s version of the spending plan adjusts for recent adverse budget news.

The Board of Revenue Estimates Thursday revised its fiscal 2024 and 2025 estimates down by $120 million and $134.9 million respectively from its December forecast.

Even with the downward revision announced Thursday, revenues for fiscal year 2024 are still expected to increase by $850 million to more than $24.5 billion

In the coming fiscal year, revenues grow by an estimated 1.1%, or $260 million when compared to the current year.

To offset the $250 million in revenue write-downs, the Senate budget committee tapped a fund of larger than expected capital gains taxes.

“This covers a big chunk of that,” Guzzone said.

The committee also authorized Moore to draw from the state’s Rainy Day Fund to cover a $236 million miscalculation of Medicaid expenses by the Moore administration.

Guzzone said the plan crafted by the Senate is balanced, meets the growth recommendations of the legislature’s Spending Affordability Committee, and leaves an additional $40 million more than the recommended $100 million cash balance for the end of the year.

“I’m pretty proud of what this committee has done,” he said.

The proposal also includes an initial $90 million downpayment on the Climate Solutions Now Act of 2022. The funding comes from Maryland’s Strategic Energy Investment Fund, which is typically used to provide grants for clean energy projects.

The committee voted to withhold $500,000 from the State Department of Assessments and Taxation pending a report on a property tax assessment mailing error. The agency failed to notify about 107,000 homeowners of new property assessments.

The language adopted by the Senate committee withholds the funding until the agency submits a report on the miscue. That report will be due on July 1.

The committee also voted to continue the required quarterly reports on the Charlotte Hall Veterans Home. Lawmakers said they want to continue monitoring progress at the state’s only assisted living facility for veterans following reports of abuse and mistreatment of residents last year.

Guzzone said his committee has already agreed with the House Appropriations Committee on several issues, including reducing a cut to community college aid based on student enrollment.

Moore in January said cuts to both the Cade program for community colleges and state aid for students at private colleges needed to be “rebased” following the pandemic.

Raising taxes remains an area of disagreement between the House and Senate.

Ferguson and Guzzone are staunchly opposed to new or increased taxes this year. The fiscal leaders in the House, Appropriations Chair Ben Barnes (D-Prince George’s and Anne Arundel) and Ways and Means Chair Vanessa Atterbeary (D-Howard), said Thursday that a failure to pass a tax package now would endanger the Blueprint for Maryland’s Future education reforms, among other priorities.

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