By Holden Wilen
March 19, 2020
The General Assembly adjourned March 18, bringing to an end a legislative session that saw the passage of a sweeping public education reform bill but also new taxes that will affect businesses across the state.
Due to the novel coronavirus pandemic, the General Assembly ended its 90-day session several weeks early.
Democrats, who have a super-majority in both chambers of the General Assembly, successfully passed their signature bill that implements new education formulas recommended by the so-called “Kirwan Commission.” The bill requires $3.8 billion in public education funding by 2030. During a 10-year ramp-up period, the reforms will have an overall cost to the state and local jurisdictions of $32 billion.
To help pay for the Kirwan plan, lawmakers looked to pass a package of bills that would have raised more than $700 million in revenue. With a limited amount of time, they did not pass all of the proposals. Among the ones that will make it to Gov. Larry Hogan’s desk include a new tax on digital downloads and a constitutional amendment to allow sports betting.
One of the more odd maneuvers occurred when the Senate amended a bill that would increase Maryland’s tobacco tax by adding on a new tax on digital advertising. The ad tax was originally proposed in its own separate bill and could potentially raise $250 million in the first year of implementation.
The tax on digital downloads, proposed by Del. Marc Korman, would apply Maryland’s 6% sales and use tax to digital services, including music, e-books and video streaming services.
Some, including Hogan’s spokesman, have questioned why the General Assembly wanted to rush through new taxes when Democratic leaders previously said they have the first three years of the Kirwan plan paid for.
Donald C. Fry, CEO of the Greater Baltimore Committee, applauded lawmakers for passing the Kirwan bill, which includes things like expanded prekindergarten, increased teacher pay and more vocational training. He also said he was glad the General Assembly lowered Baltimore City’s funding burden.
Baltimore City schools will receive $584 million in additional state funding in 2030 under the new law. The city will also have to spend $152 million, but that’s a reduction from $330 million in the original bill. Lawmakers amended the legislation to take some of the burden off of poorer jurisdictions.
“Having a strong education system is important to business because we want to have a strong workforce moving forward,” Fry said.
Another notable bill aimed at ensuring the Preakness Stakes stays in Baltimore also passed. The measure allows the Maryland Stadium Authority to issue up $375 million in bonds to build new racetracks at both Pimlico Race Course and Laurel Park. It ratified an agreement negotiated by Baltimore officials, Maryland’s horsemen and the Stronach Group, the company that owns the tracks.
Businesses also can be thankful that the General Assembly did not pass bills that would have eliminated various tax credit and incentive programs.
While the business community saw some wins and losses, Fry said he thought overall the General Assembly, led by new House Speaker Adrienne Jones and new Senate President Bill Ferguson, did the best it could in difficult circumstances.
“The process that they had to resort to was certainly not ideal but we were in uncharted waters,” Fry said. “These were scenarios no one could imagine coming into play. You had two new presiding officers under tremendous stress throughout session…then to have this thrust on them, they did remarkably well.”
The General Assembly will reconvene for a special session in the last days of May to tackle legislation related to the impact of the coronavirus outbreak.
To read the full story, visit Baltimore Business Journal’s website.
Source: Baltimore Business Journal
Also see: 2020 End of Session Snapshot