Budget panel defers decisions on taxes, transportation and childcare

Lawmakers made headway on a compromise $63 billion spending plan Wednesday but left unresolved the divide on $1.2 billion in proposed revenues.

Instead, fiscal leaders pushed off what is likely to be tougher discussions until the final full week of the 90-day legislative session.

Senate Budget and Taxation Chair Guy Guzzone (D-Howard). Photo by Bryan P. Sears.

“We’re going to keep working through it all,” said Senate Budget and Taxation Chair Guy Guzzone (D-Howard). “A lot to absorb and think about and work on. Obviously, it’s all a big priority and we’re going to keep it going.”

During the first meeting of the House-Senate budget conference committee Wednesday, senators accepted many of the House changes to the fiscal year 2025 budget proposed by Gov. Wes Moore (D).

The biggest differences reside in a companion budget reconciliation bill where the House added new corporate taxes, an expansion of gambling and a proposal to shore up the state’s Transportation Trust Fund.

Instead, the conference committee decided to delay decisions until the panel meets again on Monday.

“There’ll be discussions over the next day or two,” said House Appropriations Chair Ben Barnes (D-Prince George’s and Anne Arundel) before turning to Guzzone to ask if he wanted to adopt any of the House revenue proposals Wednesday.

“Not yet,” Guzzone responded.

The House last week passed a version of the budget that incorporated $1.2 billion in new revenues including combined reporting corporate taxes and expansion into iGaming.

Barnes, House Speaker Adrienne A. Jones (D-Baltimore County) and other House leaders say there is an urgent need to address looming budget gaps.

House Ways and Means Chair Vanessa Atterbeary (D-Howard) and House Appropriations Chair Ben Barnes (D-Anne Arundel and Prince George’s) confer during a Saturday floor session in the House of Delegates. Photo by Bryan P. Sears.

The structural deficit — the difference between projected spending and estimated revenues — is projected to reach $1 billion in fiscal 2026, according to legislative analysts. In fiscal 2027, the last year of Gov. Wes Moore’s term, it would grow to $1.3 billion. A year later, it would more than double to $3 billion — about 12% of the general fund revenues projected for that year.

In January, legislative budget analysts said the deficit projections are the largest since the Great Recession.

The shortfalls are driven by the costs of K-12 education as the state implements the most expensive portions of the plan known as the Blueprint for Maryland’s Future.

Additionally, the House also wants to address a more than $3 billion shortfall in the state’s Transportation Trust Fund over the next six years. Barnes and others say their proposal eliminates that gap.

Senate leaders including Guzzone and Senate President Bill Ferguson (D-Baltimore City) have repeatedly rejected broad based tax increases or gambling expansions.

Also left unresolved, for now, are differences between the House and Senate regarding childcare.

“Childcare is incredibly important to the House — both the Ways and Means and Appropriations — so I hope we can reach an agreement and move forward on this,” said House Ways and Means Committee Chair Vanessa E. Atterbeary (D-Howard).

The Senate removed a provision banning any freeze of the Child Care Scholarship program. Instead, they required 60 days notice before any freeze by the Maryland State Department of Education could be implemented.

The House struck the Senate changes, reimposing a ban on any freeze on aid. Additionally, the House prohibited any increase in copays.

Moore’s budget, which includes an increase in spending for the program, proposed implementing a sliding scale of fees on families based on income for new families. Those already in the program would be exempt from the proposed copays.

“Look, it’s very important, I think, to everybody but making the program work is something we’re going to really make sure we’ve thought through,” Guzzone said. “So, let’s just talk about it some more.”

Republish