Maryland lawmakers plan to spend this week undoing dozens of vetoes from Gov. Larry Hogan, reviving measures ranging from programs to boost public schools to a first-of-its-kind tax on digital ads.
Democrats hold such significant majorities in both chambers of the General Assembly that they typically can override the Republican governor’s vetoes, even if they lose a few members from the original votes.
“We have the votes on every bill,” said Del. Eric Luedtke, the Democratic majority leader in the House of Delegates. “There will be robust debate, but I expect all of these vetoes to be overridden.”
Still, the Hogan administration is pushing to keep at least two of the vetoes in place, citing the economic downturn caused by the coronavirus pandemic.
Chief among the vetoes that Democrats plan to override is a measure called the Blueprint for Maryland’s Future. It sets out a 10-year plan for implementing and paying for a series of programs designed to return the state’s public schools to among the best in the nation.
The plan includes enhanced teacher training, an expansion of prekindergarten and improvements to courses to prepare high school students for college or jobs. The programs were recommended by the Kirwan Commission, named for William “Brit” Kirwan, a retired University System of Maryland chancellor who led the panel.
Hogan lobbied against the bill and then vetoed it last year, arguing the programs are too expensive to take on during the pandemic-induced recession and the state would need to increase taxes to pay for the changes. Hogan commented on social media three weeks ago about the bill, saying: “This is the worst possible imaginable time to raise taxes on struggling Maryland families and small businesses.”
The plan is expensive: By the time it’s fully phased in over 10 years, the estimated price tag is nearly $4 billion, a cost that state and county governments would bear jointly.
Democrats say they have ways to pay for the plan. The costs for the first several years are covered, as lawmakers dedicated parts of various revenue streams — including taxes collected on online sales — to a fund for the education programs. And there are potential additional sources of funding, such as newly legalized sports betting.
“It’s just a lie that the Kirwan bill is a tax increase. That’s a flat-out lie,” said Luedtke, a Montgomery County Democrat.
Asked about Luedtke’s comment, Hogan spokesperson Mike Ricci said: “It is understandable that the majority leader would be so defensive, given that many Marylanders are concerned about the true costs of Kirwan.”
The advocacy group Strong Schools Maryland has urged lawmakers to maintain their support of the Kirwan plan. It lined up more than 50 business and community leaders to sign a letter last week in support of the plan.
“The impact of COVID on our schools and on our economy is raising the stakes dramatically, making the Blueprint significantly more imperative,” they wrote.
Other business groups, meanwhile, have leaned on lawmakers to let stand Hogan’s veto of a bill that would create a first-in-the-nation tax on digital advertising.
Supporters of the legislation say the goal was to make Big Tech companies like Google and Facebook pay taxes on targeted ads that trail users around the internet.
But a coalition of business groups called Marylanders for Tax Fairness cautions the tax would be passed on to small businesses that place ads online — something they’re doing as they pivot to increasing online sales during the pandemic.
The Maryland-Delaware-D.C. Press Association, of which The Baltimore Sun is a member, is part of the coalition. The association has said local media companies can’t afford to absorb the costs and therefore could see a downturn in advertising sales, ultimately leading to less local journalism.
“It’s simply not a time to raise taxes on hardworking Marylanders and small businesses,” said Republican Lt. Gov. Boyd Rutherford, who spoke during a video news conference Thursday on behalf of the coalition. “The power of taxing is one of the most important powers that government has and, unfortunately, the General Assembly far too often wields this power indiscriminately without regard to the consequences.”
Rutherford’s public support for sustaining the veto represented a rare foray into a political debate for the lieutenant governor, who typically sticks to nuts-and-bolts aspects of governing. Rutherford has said he is considering a run for governor in 2022; term limits bar Hogan from seeking reelection.
Marylanders for Tax Fairness counts hundreds of businesses and business-boosting organizations in its coalition. Supporters and members have sent more than 12,000 emails to lawmakers urging them to keep Hogan’s veto in place. The coalition also has bought radio and online ads.
Doug Mayer, a spokesperson for the coalition, says he believes it has “a fighter’s chance.”
“It’s a tough environment. They have a veto-proof majority,” he said.
Maryland Policy & Politics
Senate President Bill Ferguson, a Baltimore Democrat who sponsored the digital ad tax, said it targets companies that make at least $100 million per year off digital ads in Maryland and who “contribute zero dollars to the civic infrastructure.”
Ferguson said Democrats will override the veto and put the ad tax in place because these companies “should be contributing — just like the barbershops, car mechanics, retailers on Main Street. This is about a fair-share approach to ensuring that Maryland can sustain its future.”
Ferguson said Friday that he’s submitting follow-up legislation that, if approved, would prohibit the tax from being passed down to local businesses that place ads and would exempt news organizations and television and radio companies from paying the tax.
That didn’t allay the concerns of the coalition opposed to the tax.
“Senator Ferguson invented a problem with this tax and his proposed solution is eerily reminiscent of Soviet-era price controls,” Mayer said. A better plan “would be not to create the problem in the first place.”
Through legislative maneuvering at the end of last year’s pandemic-shortened General Assembly session, the digital ad tax was coupled with an increase in tobacco taxes and new taxes on nicotine products such as vaping pens and electronic cigarettes. If the veto is overturned, as Democrats intend, both of those taxes would go into effect, as well.
Other vetoes that Democrats plan to override include legislation:
- Requiring background checks on all sales of rifles and shotguns, including those sold privately.
- Sending $5.5 million over five years to boost the financially strapped Baltimore Symphony Orchestra.
- Charging sales tax on digital downloads, such as books, movies and streaming services.
- Creating a $1 million annual grant fund to promote youth sports, using money from the lottery.
- Charging a fee on insurance companies to pay for the costs of the state’s new Prescription Drug Affordability Board. The Senate overrode the veto of this bill, but the House still needs to vote on it.
- Addressing crime with a trio of bills to fund crime prevention, including one bill focused on Baltimore programs. The Senate has already voted to override those vetoes, so only House action is needed now.