A $47.9 billion budget proposed by Maryland Gov. Larry Hogan sets aside money for public safety, education, transportation and other expenditures in the state.
Most importantly for Hogan’s fiscal 2021 spending plan he labeled the “Accountability Budget”: no tax increases.
“We haven’t had a single tax increase in the entire five years since I’ve been governor,” he said Thursday, Jan. 16 while announcing legislation to provide tax relief for 230,000 Marylanders. “Over the past five years, we’ve been standing up and fighting hard to make it easier for all of our Maryland taxpayers.”
According to a report last month from the Spending Affordability Committee, the state faces a structural deficit of $491 million next year and could rise to $1.2 billion by fiscal year 2025. The committee, comprised of state lawmakers and citizen advisory panel, recommended passing a balanced budget by the end of this year’s 90-day session.
Those figures, highlighted in the report, “is forecast before accounting for any recommendations” from the $4 billion public school plan from the Commission on Innovation and Excellence in Education. The commission seeks to expand early childhood, increase teacher salaries and implement college- and career-readiness programs by 2030.
Based on legislation approved last year, the budget allocates roughly $355 million toward some of the recommendations in the plan, called “Blueprint for Maryland’s Future.”
Hogan agrees with some of the educational proposals, but has said he won’t support any new tax increases to help for pay it.
However, the Democratic-controlled legislature made approving the plan a top priority. One way floated to pay for the ambitious plan to restructure the state’s public education system is tax digital advertising.
The legislation proposed by Senate President Bill Ferguson and his predecessor, Sen. Thomas V. Mike Miller Jr. (D-Calvert County), seeks to tax revenue on internet companies such as Google up to 10 percent for users with a Maryland internet protocol (IP) address.
According to the bill, the state comptroller would administer the tax with gross revenues going toward the education plan. The bill, scheduled to be reviewed by the Senate’s Budget and Taxation Committee, allows companies to report how much they earned from digital ads.
If revenue exceeds $1 million, then a company would file a state tax return to outline how much money was generated and to keep a record of the sales.
Other anticipated revenue in the budget estimated at $47.6 billion includes $13 billion in federal dollars, $11 billion from income taxes and $5 billion from sales taxes.
Meanwhile, Hogan’s proposed budget earmarks $733 million for school construction that includes 19 projects in Baltimore City, 16 in Montgomery County, six in Anne Arundel County and three in Prince George’s County.
In Prince George’s, the budget allocates $15 million for renovations at the Largo campus of the county’s community college.
Another $66 million would go toward transportation projects, including $19 million to complete work on a new interchange at Route 210 and Kirby Hill/Livingston roads in Oxon Hill.
What’s missing from the budget, said Del. Erek Barron (D-District 24) of Mitchellville, is $7 million from a state program that helps revitalize communities. According to a description of the National Capital Strategic Economic Development fund, about 85 percent of projects approved are between Interstate 495 and D.C.
“That’s a big hit for us and totally contrary to the governor’s stated priorities,” Barron said. “So we will work to correct this.”
If lawmakers approve a balanced spending plan for the operating and capital budgets, it would take effect in the next fiscal year that begins July 1.