Maryland Senate debates funding shift from transportation to education in budget

ANNAPOLIS, Md. - The Maryland Senate debated a major funding shift in the state budget Wednesday that would set money aside for future K-12 education reforms, rejecting an amendment supported by Republicans that would have steered $300 million to help pay for tax relief for senior citizens.

The debate came just before the Senate gave initial approval to the state’s $62.5 billion budget for the next fiscal year. A vote is scheduled for this week.

Changes to the budget legislation made by the Senate would transfer $300 million of $500 million that Gov. Wes Moore, a Democrat, set aside for transportation to pay for future costs of the Blueprint for Maryland's Future. That would be on top of a separate $500 million Moore allocated for the blueprint for future years. The budget bill now would raise the total amount budgeted for future blueprint costs to $800 million.

The blueprint, which is being phased in, has been vigorously debated between Democrats, who control the legislature, and Republicans, largely because of its rising costs as more of it gets implemented each year.

Republicans questioned why the state was putting so much money aside now that won't even be needed for it in the next fiscal year.

Sen. Steve Hershey, an Eastern Shore Republican who is the Senate minority leader, sponsored an amendment that would set the $300 million aside to help pay for tax relief for senior citizens that is proposed in a separate bill, called The Retirement Tax Elimination Act of 2023.

Hershey said during debate that "there's still a lot of doubt" about how affordable the education plan will be as it is implemented in future years.

"It’s certainly not going to be what our intended use was with the policy we created, but something I believe that’s very different and maybe affordable," Hershey said.

But Democrats, who have continued to support the sweeping education reform law that was approved in 2020, contend it's central to the state's future success.

"We made a commitment to education that was multiyear — that was transformational in my mind — provides what I think probably is the best social justice program that we’ve ever created as a state," said Sen. Guy Guzzone, a Democrat who chairs the Senate Budget and Taxation Committee, adding that living up to the commitment was "a critical undertaking and a complicated one."

Guzzone also pointed out that lawmakers approved tax relief for retirees in the state budget last year.

The blueprint focuses on expanding early childhood education, increasing teachers’ salaries and providing aid to help struggling schools adequately prepare students for college and careers. It is the product of a state commission that spent three years developing it.

With billions in additional funding when fully implemented, the law also aims to address inequities in schools that serve high numbers of children in poverty.

Guzzone noted that the tax relief proposal supported by Hershey would cost far more than the $300 million named in his amendment in future years.

"I don’t know where we would come up with the rest of that money, quite frankly," Guzzone said. "We wouldn’t be able to handle all of the priorities that we have already in the budget — let alone living up to the blueprint."

But Sen. Justin Ready, the Republican minority whip, said lawmakers also are grappling with how they'll pay for the blueprint in future years.

"We should reduce this retirement tax burden to keep our seniors here," Ready, of Carroll County, said. "They will spend money here, they’ll pay other types of taxes here, and they will contribute to our community."

Sen. James Rosapepe, a Democrat, said the tax relief amendment would leave the state with a big deficit.

"Secondly, pitting seniors against children is not the kind of approach I think we need to take here," Rosapepe said.

The Maryland House already has approved a budget that would shift $400 million of the $500 million in transportation money to the blueprint for a total of $900 million. The House and Senate will need to work out the difference in the budget bill before the the General Assembly adjourns April 10.