Last week, it was announced that the state of Maryland is now looking at a budget surplus of $7.5 billion over the next three fiscal years.
In 2021, when Maryland announced a $2.5 billion surplus, the existence of the surplus was positioned as an example of “fiscal responsibility” by elected officials. At the time, Battleground Baltimore pointed out that many Baltimoreans asked a very good question: What exactly is “responsible” about not spending money on Marylanders in need during an unprecedented event like the COVID-19 pandemic?
“So what you’re saying is we can afford the new HVAC systems in crumbling schools,” one Twitter user said, referring to the frequent heating and air conditioning problems in Baltimore City’s severely underfunded public schools.
In particular, Gov. Larry Hogan and State Comptroller (and Democratic candidate for governor) Peter Franchot have frequently bragged about the surplus they have facilitated. Last year, Hogan boasted about saving money amid what we called “a world-changing twelve months that left many Marylanders on edge about the pandemic and their economic futures.” According to Hogan, he had reined in “out-of-control spending” in the state since being elected.
Franchot heralded the 2021 surplus as “a once-in-a-generation opportunity to invest in programs that lift all Marylanders and help stabilize housing and other critical expenses for our lower- and middle-income families.”
The latest surplus numbers moved Hogan to echo Franchot. The Governor dropped the “savings” talk and instead called the surplus “a once-in-a-generation opportunity to advance substantial tax relief for our families, small businesses, and retirees.” It was a Republican remix of Franchot’s statement.
In response to the surplus news last week, Franchot called for a $2,000 stimulus for Marylanders making the lowest wages: “Send $2,000 survival checks immediately to 470,000 Maryland families that are low-wage earners. They are struggling,” Franchot said.
Republican Del. Kathy Szeliga—one of the sponsors of some truly reprehensible anti-trans legislation, by the way—said Hogan should give $1,000 in tax relief to every Marylander who pays income tax, which would add up to about half of the surplus.
While few lawmakers were especially excited about either of those ideas, one of Franchot’s other proposals was a huge hit: Amid increasing gas prices, Franchot said the state should suspend the gas tax for three months. There was an almost immediate decision to push the gas tax suspension, with Hogan saying he supported it soon after Franchot proposed the idea.
“At this time of global uncertainty due to Russian aggression, we are working with our legislative partners on an emergency suspension of the gas tax to help with the pain at the pump. We also support ongoing efforts in the legislature to suspend automatic increases in the gas tax,” Hogan said.
A bill to suspend the gas tax for 30 days was soon introduced. State Senate President Bill Ferguson and Speaker of the House Adrienne Jones said they supported the gas tax suspension too, calling it “immediate relief to families.”
Immediate relief to Maryland families—and all Marylanders—would, of course, be actual immediate relief, such as putting the surplus money directly into their hands. It would require being far more inclusive than Franchot’s $2,000 to low-wage earners idea. Immediate relief is not people paying a little less at the pump for one month or maybe three months.
Indeed, the desire to project “fiscal responsibility” is so strong among state officials that it normalizes propositions such as using part of the surplus towards the state’s “rainy day fund,” where additional funds are held for economic instability and other crises.
Two years into the pandemic, many Marylanders might think back on how much more the state and federal government could have done for them, and ask what a “rainy day” looks like compared to all the days they’ve endured since March 2020.
Earlier this week in Annapolis there were committee hearings on Maryland House and Senate bills (HB 1486 and SB 1010) to suspend the gas tax for 30 days. The fervor over pushing this bipartisan-supported bill through as soon as possible led to a discussion mostly about whether or not they should just go ahead and suspend the gas tax for 90 days instead.
That excitement was tempered slightly by very real concerns about how this tax suspension could be comprehensively implemented. For example, gas currently for sale at gas stations has already been taxed, so stations would lose money if they passed this state-mandated savings onto consumers. Also, apparently, the state can’t really force the gas stations to pass on that tax savings to their customers.
The bill was approved by House and Senate committees anyways, and it is expected to soar all the way to Hogan’s desk in days.
The gas tax is a little more than 36 cents per gallon, so suspending it will save many individual Marylanders—those who drive, of course—some money. But the downside is that suspending the tax also means there will be significantly less money generated to improve road infrastructure, which will then also reduce infrastructure jobs. Don’t worry, Franchot explained, part of the surplus will be used to offset all of that, too. This is a wonky way to approach the budget, as well as a byzantine way of disbursing surplus funds.
Plenty of good will be done with the surplus money, but every surplus dollar spending proposal introduced, discussed, heavily debated, and eventually approved (likely not without means testing) is money not already spent on Marylanders who could use the help now and could’ve used it over the past two years during all of this statewide “saving.” For example, last month, Hogan—in between talking up his ridiculous “refund the police” campaign—shorted the majority Black school systems of Baltimore City and Prince Georges County by tens of millions: “Hogan took over $125 million from Black and Brown children and is now touting this stolen money as a surplus. We promised over $125 million to Baltimore City and Prince George’s last year…and he just took it out of his budget,” State Delegate for Baltimore City Marlon Amprey tweeted.
Also, suspending the gas tax isn’t a particularly effective policy. CNN recently looked at the idea of a “a gas tax holiday,” and said “states may want to provide more targeted assistance to lower-income residents, who have a harder time coping with skyrocketing gas prices.” Lucy Dadayan, of the nonpartisan Tax Policy Center, told CNN, “It’s much, much more reasonable to give rebates to the lowest-income taxpayers…eliminating or temporarily suspending gas taxes is not a prudent tax policy.”
This week, the latest Goucher poll took on the surplus issue. Among 625 Marylanders polled, 50% said the surplus should be spent on public services and 49% on tax cuts. Those were the only two options. The poll prompted: “The state of Maryland currently has a budget surplus. The governor and the state legislature in Annapolis will decide how to spend the extra revenue during the 2022 legislative session. In thinking about how this money should be spent, which of the following comes closest to what you generally prefer: decreasing taxes or increasing funding for public services?”
We wonder if a third option, such as “give all of it to the people who need it immediately,” might have given everybody a better window into what people need and how they’d really like these billions to be spent.