The Maryland House of Delegates could give its final approval Wednesday to a fiscal 2026 spending plan that includes more than $1 billion in new taxes.
House Democrats and Republicans engaged in a sometimes testy, nearly seven hour debate of a two-bill package. Republicans, who make up less than 30% of the 141-member House, offered up 20 proposed amendments on those two bills.
House Appropriations Chair Ben Barnes (D-Prince George’s and Anne Arundel) said Republican amendments would make cuts to education in some counties, aid to poor children, and students with disabilities.
“So yeah, you know what? This is a difference in values. We disagree,” Barnes said. “And it’s nice that we can finally have a real conversation about our difference in values, because we would rather tax millionaires a little more so that students with disabilities can get the services they need; because we would rather take a little cut to tourism rather than a cut to every kid in this state or families who need Medicaid.
“So look, we can argue this all day,” he said. “We have a difference in values. The paper says what it says. We disagree. We chart a different path.”
The issue of values became one of a number of running themes.
House Minority Whip Jesse T. Pippy (R-Frederick) proposed an amendment to cut a 1% cost of living increase for state employees. The money would instead be pushed to services at the Developmental Disabilities Administration.
“Let’s talk about values. These are the minority party values,” Pippy said. “We value our most vulnerable over state employees getting another raise because, quite frankly, they’ve had a 36% increase in salary and benefits for the last few years.”
Maryland’s $67 billion budget — a figure that includes all spending including general and federal funds and higher education — is one-tenth of a percent higher than the current year.
The $27 billion general fund budget, which encompasses state revenue from sources including income and sales taxes, is $414 million less than the current year.
The plan also solves a projected $3 billion deficit for the coming year. The solution involves more than $2 billion in what Gov. Wes Moore (D) and legislative Democrats have called cuts.
The plan also includes more than $1 billion in taxes including a proposed $500 million services sales tax on data and IT services. That tax has already caused one business owner, who is also the vice chair of a House Committee, to move his business from Southern Maryland to Virginia.
Another $367 million would come from a 2% surcharge on capital gains income over $350,000. The rate is double what Moore proposed in his budget. Most of the tax would land in the state’s general fund, with about 40% earmarked for the state’s Transportation Trust Fund.
The state would also raise $344 million from changes in the tax code, including the creation of two new tax brackets: Those earning $500,000 to $1 million would pay 6.25%; those above $1 million in earnings would pay a rate of 6.5%.
Democratic lawmakers and Moore claim 94% of Marylanders will either see a decrease or no change in their taxes.
“This plan does not increase taxes for 94% of Marylanders,” said Del. Emily Shetty (D-Montgomery). “Ninety-four percent of Marylanders will not see their taxes go up. They’ll either see no change, or they’ll see a decrease.”
Del. Mark N. Fisher (R-St. Mary’s) called the claim “silly.”
“No one believes that, because it’s not true,” Fisher said. “And the 6% that you say that you’re taking from are the 6% that have the most ability to leave. And you know what I would say to them, maybe you should leave and stick it once and for all to the majority party and show them that all wealth isn’t created by government. It’s created by the private sector.”
House Minority Leader Del. Jason C. Buckel (R-Allegany) said the average tax decrease will range between $53 and $61.
The amount is lower than the $173 average cut that was part of the tax changes proposed by Moore in January.
That “$5 per month,” Buckel said, would be gobbled up by other fees imposed by the state, such as a 6% sales tax on vending machine purchases.
“Guess what happened to your income tax cut? Gone. Gone. You just ate it up in what you paid additional to the vending machine.,” Buckel said. “If you buy a car that year — gone. We’re raising the excise tax. Your tax cut you’re getting, somebody that makes $70, $80, $90, $100,000 a year. That 53 bucks a year, you’re getting, go out and buy a new car that year. Your income tax cut is gone that year, and the next year, and the next year, and the next year. You just pay more money. Gone.”
As the hours dragged on, the debate boiled over.
During one tense exchange, House Republicans openly criticized Democrats, including House Speaker Adrienne Jones (D-Baltimore County), whom they perceived was rushing through debate and stifling the voices of the minority party.
Republicans claimed Jones ignored minority party delegates who wished to speak. They also complained that House Majority Whip Del. Jazz Lewis (D-Prince George’s County) used a procedural rule to curtail debate.
In one such instance, Del. Robin L. Grammer Jr. (R-Baltimore County) proposed language that would require an annual report from the Department of Transportation updating the status of bridge vulnerability assessments.
But Democrats shot down the proposal saying that the amendment was drafted improperly and adding that lawmakers were working on a separate amendment that would be added to the budget later in the process.
But as Grammer and Republicans attempted to press their case, Lewis moved to end the debate and force a vote. That led to a tense exchange between Republicans and Democrats including Jones.
“For some of you, maybe the majority party, it’s a routine day,” Pippy said. “Respectfully for us, this means something.
“And so if we want to get up and have an opportunity to explain our vote, or we want to get up and make an argument, that’s what we’re here for. So I don’t want our members to feel like we’re getting shut down,” he said.
Others were more blunt.
“We chose you as our speaker several years ago, and since that time, many of us have stood up. You have refused to call on us. You have seen us standing. You have skipped over us,” said Del. Lauren Arikan (R-Harford).
“We consistently try to make our voices heard in a state that marginalizes us and ignores us constantly, in a chamber that has been gerrymandered madly to continue to marginalize us,” she said. “You don’t have to listen to us speak right now. You can continue to cut us off. But you will hear us in the election just like you did in November.
Ultimately, it was Lewis who stepped in and attempted to de-escalate the situation.
“I understand there are many things for us to debate on revenues and whatnot, but this right here, you just got a promise to do what you want. She’s promised to do it. The committee chair just promised to do that. No one is steamrolling here,” Lewis said.
“You’ve received a promise, and we’re going to honor them,” he said.
The vote Tuesday keeps the bill on pace to land in the Senate later this week.
The Senate Budget and Taxation Committee Tuesday finalized its recommendations on the budget. The House and Senate have agreed on a broad framework for the budget.
One area they disagree on is funding for transportation. Both chambers have agreed to provide more than $400 million but have not finalized a plan on how to reach that number.
A final agreement is not expected before a key deadline passes March 31.
Lawmakers in both chambers said they believe a conference committee to resolve differences in the budget will not lead to protracted debates as has happened in years past.
The General Assembly is expected to finish work on the budget before the 90-day session is scheduled to end on April 7.
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