Budget Deal - Weekly Update

The one piece of legislation that we have to pass each year is a budget. And unlike what legislators at the federal level deal with, our budget must be balanced. Early in the legislative session, my weekly email provided a primer on the budget and some history as to how we got to this current moment. That email was sent two days after the current president was sworn in and the challenges have mounted from there with both direct federal funding and the economic impacts of federal actions causing us severe harm.
Some of you have written to me asking for a cuts only approach to balancing our budget. Others have suggested much more in taxes to address the current deficit and prepare for future federal actions, such as significant rollbacks to Medicaid (healthcare for those in need). My own view is that the best approach is a combination of both and I was pleased to see the House, Senate, and Governor announce a compromise balanced budget plan last week. I provided a brief summary of this budget deal via video a few days ago which you can watch here. That video focused on specific budget elements I have heard from you about and what is in and what is out of the final budget deal. To summarize:
Out
-Significant cuts to the Developmental Disabilities Administration.
-Lowering the estate tax exemption from $5 million to $2 million and eliminating the inheritance tax.
-Lowering the corporate tax rate from 8.25% to 7.99%.
-Online retail delivery fee.
-Entirely eliminating the itemization of tax deductions.
-Broad-based Business-to-Business Services Sales Tax (not proposed in the Governor's budget but discussed).
-iGaming, which is online gambling (not proposed in the Governor's budget but discussed).
In
-$1.6 billion in budget cuts across a wide range of programs (a full list is linked below).
-Increase the sports wagering tax rate from 15% to 30%.
-Increase the recreational cannabis tax rate from 9% to 15%.
-Increase the income tax for income over $500,000 from a tax rate of 5.75% to 6.25% ($500,000-$1,000,000) and 6.50% (excess of $1,000,000) (income thresholds vary for joint filers).
-Phase out of itemization for incomes over $200,000.
-3% services sales tax on Information Technology, something a wide range of states do including Pennsylvania and Texas.
A link to the state budget bill is here. A summary report is here. A link to the bill that accompanies the budget to make statutory changes necessary to balance it--known as the Budget Reconciliation and Financing Act--can be found here. And a summary report is here. The summary includes a list of budget cuts on page 10. The summary reports have a lot more information, but if you have any specific questions please feel free to reply to this email or reach out in other ways.
With these actions, the state will have $2.4 billion in reserves including both a cash balance and a Rainy Day Fund and a structural balance next budget year.

TRANSPORTATION UPDATE
​As part of the annual budget, the Maryland Transit Administration has to submit bimonthly reports on Purple Line progress. The most recent report--which does not change the date for the Purple Line opening--can be read here.

LEGISLATIVE UPDATE
I have shared before that one of the bills I am sponsoring this year is the Local Boards of Elections Transparency Act, sponsored in the Senate by Senator Cheryl Kagan. This legislation requires our local boards of elections to livestream their meetings and post their agendas. One thing I have not mentioned is that Montgomery County has led the way in already doing this work and we want to see other counties' boards follow our county's lead.
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Bills that have crossed from one chamber to the other will begin to move quickly through the legislative process, particularly when they are identical to other bills that have moved. One of my bills has already moved through the Senate, the Maryland State Mineral Act, which makes chromite the state mineral (an issue brought to me by a constituent).

LEGISLATIVE SCHOLARSHIP
State legislators award higher education scholarships for those attending Maryland institutions or non-Maryland institutions with unique majors (not available in Maryland).  Learn more about my office's program at https://www.marckorman.com/scholarship.html.

COMMUNITY NEWS
​Congratulations to Bethesda's Daniel Schlaff, who has been re-appointed to the Bethesda Urban Partnership Board of Directors.
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Congratulations to Sue O'Hara (Individual Hero) and the Bethesda Central Farm Market (Community Hero) on their Heroes Against Hunger recognition from Manna Food Center.
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One of the amazing aspects of our district is the many authors who live there. Today I want to shout out Josh Silver and his new book, Ending Redlining through a Community-Centered Reform of the Community Reinvestment Act. I first learned of the book through a Baltimore Sun op-ed he authored.

COMMUNITY EVENTS 
On Thursday, May 8th at 6pm, the Maryland Transit Administration will host the latest Bethesda Chevy Chase Purple Line Community Action Team meeting. The meeting is virtual and can be accessed here.

OFFICE CORNER
Tomorrow is Major League Baseball's Opening Day. We live in challenging times, but as former MLB Commissioner Fay Vincent said, "This is not a day for concerns. This is a day for pleasure. There are concerns in baseball but they get dissolved in the bright sunshine." In honor of Opening Day, here is a look at some of the Baltimore Orioles memorabilia in my office. I grew up in Montgomery County in the 1980s and 1990s when the Os were the home team and I have stuck with them through thick and thin--and wow has it been a lot of thin!