CUMBERLAND — Western Maryland lawmakers cautioned residents Thursday of the potential for a variety of fee and tax increases in coming years as Maryland struggles to solve a fiscal 2025 budget deficit.
News of the increases came during a legislative wrap-up forum sponsored by the Allegany County Chamber of Commerce held at the Cumberland Country Club. Elected officials participating included Sen. Mike McKay and Dels. Jim Hinebaugh and Terry Baker, all Republicans.
Although final numbers for the fiscal 2025 budget are not in yet — Gov. Wes Moore has until May 28 to sign into law, or veto, any of the bills passed by the General Assembly — Hinebaugh provided an overview of the numbers.
“The budget approved was $63.1 billion, that is down $1.1 billion from (the 2024 fiscal budget) mostly because there is less federal funding available,” said Hinebaugh.
Although Maryland had a $6 billion surplus in 2022, Moore has been faced with a drastic budget shortfall beginning in 2023.
The Western Maryland lawmakers say the deficit is largely due to the Blueprint for Maryland Education program, which is a large-scale overhaul and investment into the state’s education system estimated to cost nearly $40 billion. The program is expected to require $3.8 billion in investment annually over the next 10 years.
“It (the Blueprint) is entirely what’s driving the deficit,” said Hinebaugh. “This year we started out (in January facing) about a $500 million deficit.
“What was interesting, even though we were facing a deficit there were a number of new programs that were added, including several from Moore.”
Hinebaugh said many of the increases were introduced in the House of Delegates.
“It started in the Senate with a balanced budget that had some fees but no tax increases,” said Hinebaugh. “But given the deficit, the (delegates in the House) said ‘let’s do something now to prepare (for the future)’ and they put together a package of fee and tax increases that would have generated about $1.3 billion in new revenue.”
Hinebaugh said a joint committee of three delegates and three senators had to be assembled to work out a compromise. It was ultimately decided that some funding from the state’s Rainy Day Fund would be used to cover the deficit.
“I believe they also approved a package of fee increases to generate about $350 million in new revenue,” said Hinebaugh.
Hinebaugh said the picture over the next four to five years is not rosey.
“If you look out to FY 2028, depending on which numbers you lose, we are looking at a deficit of somewhere between $3 billion and $3.5 billion,” said Hinebaugh.
McKay said rearranging the Blueprint investment schedule may be required. “One possible way to limit the damage is spread the cost out over more time period,” said McKay. He said the investment may have to be spread out over an additional three to five years.
The session was marked by a large number of bills, according to Hinebaugh.
“I think there was a total of about 2,714 bills submitted — 1,188 in the Senate and 1,526 in the House,” he said. “It’s hard, basically impossible, to keep track of those bills, particularly when they start adding amendments to the bills.
“Fortunately, only about 406 of those bills had been signed into law.”
Baker said many of the increases were fees. Examples he gave were a new system installed to recycle discarded paint, which will include a fee for the service.
Another example was a new ticketing system featuring speed cameras to be installed across the state in work zones. Baker said the tickets were going to be $250 but the Senate got the fine reduced to $80.