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MD Senate Passes Kirwan Recommendations; Plan to Raise Taxes During Economic Turmoil

  • Anne Arundel County
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ANNAPOLIS, Md. — Just minutes before midnight on Monday, the Maryland State Senate concluded it’s third and final reading for the bill that will potentially reconstruct how public education will be funded throughout the state over the next decade. The bill, which is known both as the “Kirwan Commission recommendations” or by it’s official title of the “Blueprint for Maryland's Future,” passed it’s final Senate reading by a 37-9 vote with some timely amendments.

The plan, which will require an annual $4 billion expansion to the public school system, was hit with amendments that would freeze the expansion during economic turmoil or if academic benchmarks weren't met.

Under the amendments, if the state sees a decline in their revenues by 7.5% over a single year, the planned additional educational funding goals would just match the rate of inflation that year. The spreading of the novel coronavirus(COVID-19), which has already led to a planned early exit of the Maryland General Assembly on Mar. 18, is expected to have major impacts on numerous economies and is likely one of the reasons economic turmoil was on the mind of lawmakers.

Additionally, the Senate determined funding can be halted if academic performance standards aren't met, which will be determined by a seven-member overseeing committee in fiscal year 2025.

The bill still must pass a nearly identical version in the House chamber to eventually reach Gov. Larry Hogan[R], where he can sign or veto. Should Hogan opt to veto, which is very possible considering he has been an open critic of the Kirwan Commission, the legislature which holds a democratic super-majority could override his gubernatorial veto. However, with the newly condensed legislative session, such proceedings might have to take place at a tentatively scheduled special session during the final week of May.

Some of the mandates that the bill is expected to improve include: raises for teachers throughout Maryland, base teaching salaries would start at $60,000, expansion of Pre-K programs, and additional vocational training programs for high school students.

However, after the recent defeat of House Bill 1628 which would have expanded the the sales tax in the state to apply to services, legislators are struggling to find alternative revenues.

Even with economic uncertainty being caused by COVID-19, which ultimately led to the largest point drop of the Dow Jones Industrial Average(DJI) in history on Mar. 16 and has caused mandatory business halts across Maryland, a number of additional taxes are still being considered to make up for needed funding. With all currently proposed tax bills in the General Assembly, the Democrats who proposed them will hope to annually rake in $700 million for education. But that still wont be enough to fund the State’s tax burden of the Kirwan bill, which  currently makes up 75% of the total costs and defers 25% to local governments.

“I am opposed to tax increases as a rule, but especially at a time like this when the economy is facing some serious upcoming challenges… it just seems irresponsible,” Del. Matt Morgan[R-St. Mary’s] said about session ending Wednesday. “[What] we should be focusing on is passing a balanced budget, which we are constitutionally required to do, and then send everyone home.”

Some of the new tax proposals include: a tax on digital advertising making Maryland the first state in the country to tax digital ad revenue, a tax on digital downloads such as music or movies/streaming platforms, and an increase to the tobacco tax.

It is worth noting that the proposed digital advertising tax was added into House Bill 732 as an arguably unrelated amendment late in the approval process, to a bill originally designated just to raise the tobacco tax. Additionally, TheBaynet.com has received a number of complaints in reference to how public input on many of these bills may have been barred as a result of a vote to close the State House to the public in light of COVID-19, poor access to floor proceedings online and some legislators reportedly having full email inboxes and voicemails.

This is an ongoing story as the Maryland General Assembly’s new “sine die” is set for Mar. 18. We will be providing updates as final actions are taken during the 2020 regular session.

Contact Zach Hill at zach.hill@thebaynet.com

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