What to watch for as MD lawmakers enter final third of session

As Maryland lawmakers and officials enter the last third of their 90-day session, key questions remain about the issues that have dominated their time in Annapolis.

Nothing has brought on more uncertainty than the Trump administration’s decisions to dismantle federal agencies, carry out mass firings, freeze aid approved by Congress and begin a trade war with neighboring countries.

And no decision has the potential to carry more weight in the session’s final weeks than Congress’s vote on a continuing resolution, which, Democrats say, could provide tax cuts to billionaires while gutting funding for Medicaid and forcing states like Maryland to kick people off the program.

If members cannot reach an agreement by March 14, the federal government will shut down, leaving federal workers without pay and potentially straining a state unemployment insurance division that’s already been responding to those affected by widespread terminations.

Against that backdrop, state Democratic lawmakers, who hold a supermajority in both Maryland legislative chambers, have yet to agree on how they’ll balance a budget that already has a more than $3 billion deficit and whether they’ll slow spending on their landmark education reform plan, among myriad other issues.

“Maryland Democrats are going to stand strong to make sure we protect as many services as we can, as many jobs as we can,” House Appropriations Committee Chair Ben Barnes said to reporters Thursday. “Clearly that’s going to become the mission of the session as we move forward.”

The final day of the session is April 7. It has appeared increasingly likely that the legislature will reconvene in the fall for a special session to respond to policies from the Trump administration.

Amid the outsized focus on Washington, D.C., Maryland’s top Democrats have been at odds over which taxes to raise and which programs to cut to cover the massive — and growing — deficit.

Gov. Wes Moore proposed an expansive reform of the state’s tax code that would, among other things, increase income taxes for wealthy filers, eliminate itemized deductions, double the standard deduction, adopt combined reporting and raise taxes on recreational cannabis sales, sports betting and casino table games.

More than 80% of taxpayers would see either a decrease or no change in their tax filings under the plan, according to the comptroller’s office.

The legislature’s presiding officers and budget committee chairs have credited the governor for his approach, but they’ve said they won’t adopt it as proposed.

They have taken particular issue with Moore’s plan to eliminate itemized deductions. While Democrats have largely voiced their concerns privately, Republicans have publicly pointed out that the proposal appears likely to increase taxes for middle-class filers.

Central to the debate about taxes have been concerns about Maryland’s reputation in the region as a high-tax state.

Members of the state’s business community have said that Moore’s income tax plan would hurt small businesses filing as pass-through entities. They’ve also said that adopting combined reporting would hinder Maryland’s regional competitiveness.

Democrats, much to the chagrin of the business community, have offered an initial counter to the governor’s plan by introducing a 2.5% tax on business-to-business services, saying it would generate more than $1 billion.

Moore has defended his plan but refrained from a public back-and-forth with the legislature. He has said his guiding principle will be ensuring that middle-class filers get relief.

Democrats have also pushed back on the governor’s proposal to cut hundreds of millions of dollars for services for those with intellectual and developmental disabilities.

The governor and his team have said the cuts are necessary to slow spending at an agency, the Developmental Disabilities Administration, that has failed to predict the rate of growth for certain programs. Democrats have pledged to restore the $460 million, but how they’ll do so remains to be seen.

Perhaps the most public point of friction between the Democratic governor and Democrats in the legislature has been over the Blueprint for Maryland’s Future education plan.

Moore, a longtime proponent of the Blueprint, proposed several cuts and delays, including to funding for community schools with concentrated poverty and for giving teachers time and space for planning, grading and professional development. He said the cuts and delays would help the state afford the plan in the coming years and help chronically understaffed school attract teachers.

But Democrats in the legislature have said that the proposals go too far and would counter progress that schools have made under the plan.

House Democrats have distanced themselves from the governor’s Blueprint proposal and abandoned the spending cuts. Senators have yet to detail their position publicly, though they’re expected to be relatively more aligned with the governor.