Maryland Senate Republicans score budget win as spending plan clears preliminary hurdle

by Bryan P. Sears, Maryland Matters
March 31, 2025

Maryland Senate Republicans scored a victory in Monday’s budget debate, winning an amendment that dedicates a new per tire fee to state highways and bridges.

It was a rare win for the minority party in floor debate, as the Senate gave preliminary approval to a $67 billion budget for fiscal 2026 that includes a tax and fee package that will raise an estimated $1 billion.

While Republicans protested the new tire fee — $5 per tire — they were able to convince Democrats to dedicate the money specifically to state highway projects instead of the Transportation Trust Fund, which goes to transit as well as roads.

“I think that was an amendment that did make a lot of sense,” said Senate Minority Leader Stephen S. Hershey Jr. (R-Upper Shore). “You know, the $5 tire tax is new. They talked about it going to the Transportation Trust Fund. We just wanted to make sure that it actually goes to roads and bridges.”

On Monday night, Budget and Taxation Chair Sen. Guy Guzzone (D-Howard) stepped in before the amendment could be rejected by budget subcommittee leaders.

“I can see the nexus on this one, so I’m going to suggest we support this one,” Guzzone said, as he quickly called for a roll call vote.

Republicans in the House proposed nearly two dozen budget amendments during debate last week, none of which passed. Senate Republicans offered about half that number of amendments Monday.

Hershey said he couldn’t remember the last time a Republican amendment was adopted. He chalked it up to the differences between the House and Senate and, in part, to Senate Republicans voting for the budget in each of the last 10 years, including two under Gov. Wes Moore (D).

“So when you talk about it from that perspective, you know, eight years of Gov. [Larry] Hogan, the first two with Gov. Moore, when we were in a better fiscal climate, I think we respected the budget process, and because it didn’t have the tax increases associated with them, I mean, you saw the amount of amendments that we had, and the vote count was probably not what people would have expected.”

Hershey also noted that some Democrats — from what would be considered more purple districts — joined Republicans on a number of amendments. Included on that list were Anne Arundel County Democratic Sens. Dawn Gile and Shaneka Henson, Katie Hester Fry (D-Montgomery and Howard), Carl Jackson (D-Baltimore County) and Mary-Dulany James (Harford).

The Senate could take up a final vote on the two-bill budget package as early as Tuesday. From there, it will head to a conference committee where the House and Senate will hammer out a final agreement.

There’s no guarantee the Senate Republican amendment will survive conference committee.

“That’s the tough part,” said Hershey.”It’s easy sometimes to get an amendment — not easy to get an amendment passed, but sometimes you get an amendment passed here, and it still has to survive that.”

Hershey said he was hopeful that since the tire fee originated in the Senate, as did the Republican amendment, that the Senate would have to ability to retain the dedicated funding.

It’s part of an amended budget that Guzzone said erases a $3 billion projected structural deficit for the coming year. He said it also reduces a similar sized deficit projected for fiscal 2027 to just $300 million.

“This is really, in my opinion, all about the structural flow for the future. That’s what this budget is defined by,” Guzzone said.

Guzzone added that “that the impact of what we have done today, or what we will do today, will have a lasting effect, not just for (fiscal) ’26 but clearly in (fiscal) ’27 in a big way.”

The expectation is that the two chambers will make short work of a conference committee agreement. The House and Senate reached agreement on the vast majority of issues two weeks ago.

Some of that agreement was on an end result, even if the two chambers disagreed on the path. The tire fee is an example.

The House and Senate broadly agreed to the need for about $420 million in additional funding for the flagging Transportation Trust Fund.

The House plan called for increasing the sales tax on car sales from 6% to 6.8%.

The Senate instead called for a 6.5% car sales tax, phased in over two years, with the tax rising to 6.35% in the first year. The it added the $5 per tire fee, which would be on top of the 6% sales tax and a $1 per tire recycling fee that goes to the state Department of the Environment.

The Senate on Monday also approved trigger provisions meant to adjust state spending if revenues decrease.

Of primary concern are ongoing reductions in federal agencies and employees and overall spending, as well as tariffs on products including vehicles that pass through the Port of Baltimore.

As part of that effort, the Senate replaced a proposed trigger tied to federal Medicaid reimbursements with one tied to overall federal aid. The amendment requires the Department of Budget and Management to track reductions in federal aid: When the amount reaches $1 billion, the department is to report to the legislature with plans for dealing with the reductions.

The amendment has a two-fold effect.

The first is to give lawmakers more input on budget actions during the interim, and it avoids immediate, direct cuts to Medicaid. Currently, the Board of Public Works can cut up to 25% of the budget without legislative approval.

Additionally, the monitoring and reporting requirement will help lawmakers better gauge when and if a special session is needed. Lawmakers, including Senate President Bill Ferguson (D-Baltimore City) have said for weeks that a special session may be necessary in September or October as the federal budget year begins and the state gets updated revenue projections.

The Senate also added a number of provisions that would slow the pace of funding for the landmark Blueprint for Maryland’s Future education reforms if revenues fall.

The first would slow funding if the Board of Revenue Estimates lowers revenue expectations at its December meeting by $850 million — roughly 3.75% — from its March projection.

Another comes if overall federal funding to the state decreases by $750 million.

If neither reaches their respective thresholds, funding could still slow down if revenue and federal funding drop by roughly $600 million combined.

Maryland has already seen a $300 million hit in education spending. Federal officials in a Friday evening letter notified the state it was pulling out the funding that the state had already spent. Guzzone said the money would likely have to be repaid in full if an attempt to seek a waiver fails.

The two chambers are also expected to add a second supplemental budget into the spending plan during the conference committee process. That supplemental from the governor is expected to contain nearly $100 million in additional spending reductions.

The Senate budget debate was faster than the House debate last week by nearly three hours. It was also, with an early exception, a more civil affair.

The debate appeared to be headed into heated partisan territory early, when Sen. Jim Rosapepe (D-Prince George’s and Anne Arundel) compared early GOP amendments to slash-and-burn reductions at the federal level.

“It’s very clear this is the down payment on the Musk-Trump administration agenda,” Rosapepe said, noting a Republican amendment went after state employees, education and health care.

“It’s clearly going to get worse in Washington, but I, for am, going to stand against the Musk-Trump administration and what they do nationally, and stand against the same policies here in Maryland,” Rosapepe said. “We need to fight back, not roll over.”

It was a moment that potentially could have sparked a bitter debate as happened in the House.

Sen. Johnny Mautz (R-Lower Shore) questioned whether the debate conformed to the chamber’s rules of decorum.

“If I were to accuse someone of doing something for another reason, that’s impugning my motives,” Mautz said. “And I think that was sort of a statement that we just heard, and I was wondering if there was a rule about that.”

Ferguson, speaking from the rostrum, said he had not initially considered the comment in the same way Mautz described.

“I understand the senator’s perspective and we’ll mind it moving forward,” Ferguson said.

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