J.B. Jennings: New taxes, fees are not the way to ensure fiscal stability | GUEST COMMENTARY

The Maryland General Assembly is made up of two chambers:  the Senate and the House of Delegates. The Senate consists of 47 members, with 34 Democrats and 13 Republicans, while the House consists of 141 members, with 102 Democrats and 39 Republicans.

Meeting annually for a 90-day session, starting on the second Wednesday of January and wrapping up on the second Monday of April, the Maryland General Assembly acts on thousands of bills that will significantly impact the daily lives of Marylanders. However, its constitutional obligation mandates the passage of only one bill during each legislative session:  the state’s annual budget. The budget must be approved before the end of the session in a balanced and identical form by both chambers. This year, it must be passed before the session adjourns “sine die” at midnight on April 8.

Approval of the state budget is the foremost task undertaken by the General Assembly in the 90-day session. Not only does the budget serve as a comprehensive state plan detailing proposed expenditures and estimated revenues for the 12-month period from July 1 to June 30 but it also incorporates any surplus or deficit from the preceding fiscal year.

Each year, one chamber assumes the lead in approving its budget version before the other; this year that responsibility fell to the Senate. Last week, the Maryland Senate unanimously passed a balanced and fiscally prudent version of the fiscal year 2025 budget. This came after extensive review by the Senate Budget and Taxation Committee, on which I serve. Despite a significant downgrade in the fiscal projections for 2024 and 2025 by the Board of Revenue Estimates, resulting from a $255 million decrease in expected sales and personal income tax revenue, the Senate successfully navigated these challenges.

As approved by the Senate, this $63 billion budget, which   is more than $1 billion less than this year’s due to the expiration of federal COVID-19 pandemic aid, implements strategic budgeting measures without resorting to tax increases. These measures include providing the governor with increased flexibility to access the $1.3 billion in the rainy-day fund, which accounts for approximately 9.4% of general fund revenues. Additionally, the budget uses a “revenue volatility fund” designed to collect capital gains taxes for use during economic downturns.

The bill now proceeds to the House of Delegates for consideration and approval. While I am encouraged by the Senate leadership’s resolute stance against implementing new tax increases to balance the budget this session, I am deeply troubled by the House leadership’s insistence on the need for over $1.2 billion in additional taxes, tolls, and fees to ensure fiscal stability for the state budget.

Undoubtedly, Maryland faces significant fiscal challenges. However, these challenges arise not from a lack of taxation but rather from legislative initiatives enacted without a clear long-term funding strategy. These initiatives have resulted in multibillion-dollar deficits projected for future budgets. Many of us in the legislature cautioned against enacting expansive spending policies without a coherent long-term funding strategy.

These legislative initiatives included education policies, climate change efforts and transportation projects that were passed during periods of record budget surpluses, largely fueled by federal pandemic aid. However, legislative analysts now anticipate a $3.4 billion shortfall three years from now, escalating to $4 billion the following year.

In conclusion, as we navigate Maryland’s fiscal landscape, it is evident that the solution does not lie in increasing the financial burden on Marylanders. Instead, we must consider modifying these legislative initiatives to enable revenues from a growing economy to align with the spending required by these policies. By promoting economic growth and ensuring prudent fiscal management, we can navigate these challenges without excessively burdening our residents.

I want to assure you that as your state senator for District 7 — Baltimore & Harford Counties — I am committed to representing your interests and viewpoints. If you have any thoughts, concerns or need assistance with personal or state-related matters, please do not hesitate to reach out to my office via phone: (410) 841-3706 or via email: jb.jennings@senate.state.md.us. Your feedback is invaluable, and I am here to serve you.

J.B. Jennings is a Republican state senator representing District 7, serving Baltimore & Harford counties.