At the beginning of Maryland’s 2024 legislative session, Governor Wes Moore introduced his 2025 budget, announcing that he intended for the state to follow a “fiscally responsible framework.” Many journalists noted his proposed budget’s shrinking of the structural deficit and elimination of Maryland’s cash shortfall, further supporting Governor Moore’s assertion of fiscal responsibility. However, throughout the legislative session, Gov. Moore has had to confront several large budget items' expenses, including the massive Kirwan education plan passed in 2021. While the state of Maryland is still making progress toward funding the plan, Gov. Moore created several new taxes and engaged in some creative financial maneuvers to get adequate funds. Previous Governor Larry Hogan allowed the expensive Kirwan education plan to go into law, though without his signature, and accompanied it with a warning of the impending massive costs. Additionally, to ensure Medicaid and foster care were adequately funded, Gov. Moore had to withdraw revenue from the state’s Rainy Day fund, a fund that exists to provide budget stability in times of revenue shortfall.
As for the new taxes going into place, the first is a biennial fee on electric vehicles and hybrids. Electric vehicle owners will be expected to pay a $250 fee every two years and $200 for hybrids to support the declining state revenue from gasoline taxes. However, this tax may have some major drawbacks as it removes incentives to purchase reduced-emissions vehicles instead of gas-powered ones. Additionally, rideshares through Uber, Lyft, or any other source will now have a 75 cent per-trip fee, which the state estimates will raise $45 million. This was controversial not only for environmental reasons, as sharing cars reduces traffic on roads and congestion when parked, but also because many ride-share trips start in low-income areas. This raises questions as to whether this fee is regressive in nature. While Gov. Moore’s hope for Maryland’s 2024 legislative session may have been for the General Assembly to be fiscally responsible in its treatment of the state’s budget, it didn’t work out that way, in part perhaps because of the governor’s lack of leadership. At the end of the day, taxes (even if called “fees”) were raised. Taxing behavior that the state should want to encourage is not a responsible policy, and hopefully, these sorts of fiscal policies will not be extended in the future.
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