Friday Five
Nov. 22, 2024 | This week's latest on Maryland business and government
1 — Are higher tolls on the way? Maryland lawmakers brace for ‘political landmines’ in transportation funding debate
Maryland officials at the center of conversations about how the state will pay for its underfunded transportation needs said they will likely soon need to make politically unpopular decisions — including, potentially, higher tolls and shifting some taxing responsibilities from the state to new regional authorities. “There are a lot of political landmines for legislators,” Del. Vaughn Stewart of Montgomery County said during an event organized by the Maryland Chamber of Commerce at the University of Maryland on Wednesday. Maryland’s transportation system is increasingly starving for cash — putting at risk needed upkeep, expansion plans and long-term goals like building out Baltimore’s light rail network.
What's to come: The Maryland Commission on Transportation Revenue and Infrastructure Needs (TRAIN), charged with looking at the problem, is scheduled to release its final recommendations to elected officials in early January. The two main suggestions from the group’s interim report last year were creating a new fee for electric and hybrid vehicles — which pay a smaller amount or nothing in gas taxes — and raising tolls to “maximize revenue.”
2 — Ferguson: ‘Everything is on the table’ to address deficit
Maryland faces a projected $2.7 billion deficit for fiscal 2026 that grows to almost $6 billion over a five-year period, according to budget analysts. Senate President Bill Ferguson said the state has “important decisions ahead to protect” Maryland against what he called “severe uncertainty at the federal level” while balancing the state budget. In a statement, he added, “Where we can, we will make cuts and adjustments to existing programs that are not achieving outcomes. We also will consider altering revenue policies so long as those changes keep our state competitive with the surrounding region. We must be targeted and purposeful in our approach. Marylanders deserve nothing less.”
Six-year outlook: By fiscal 2028, the state will exhaust the money set aside to cover the costs of education reforms and will require money from the general fund. The structural deficit grows to nearly $4.7 billion in 2028, then $5.2 billion a year later, and again to $5.9 billion in fiscal 2030.
3 — State climate commission tables debate on revenue-generating measures
The Maryland Department of the Environment (MDE) late last year estimated that the state needs about $10 billion to meet its ambitious climate mandates. But as the Maryland Commission on Climate Change worked through several items during a meeting Tuesday, MDE Secretary Serena McIlwain, who chairs the panel, moved to table the debate on the revenue measures until next month. A working draft of the report includes recommendations that the state adopt three complicated and potentially controversial measures to pay for climate programs that include a cap-and-invest scheme to make the transportation and building sectors pay for carbon emissions, the establishment of a fossil fuel transport fee, and a mandate that 40 large fossil fuel companies compensate the state for historic climate emissions.
Tracking progress: A study released last week found that Maryland cut carbon emissions by 36 percent between 2005 and 2022 and by 42 percent per capita, making it the leader when it came to states reducing greenhouse gas emissions over that 17-year period. However, the Climate Solutions Now Act, passed by Maryland in 2022, ambitiously mandates the state reduce its carbon emissions by 60 percent by 2031 and be carbon-neutral by 2040.
4 — Biden asks Congress to fund 100 percent of Key Bridge rebuild as part of disaster aid
In a recent letter to House Speaker Mike Johnson on Monday, President Biden asked for nearly $100 billion in emergency relief funding, including the rebuild of the collapsed bridge “at 100 percent Federal cost share.” The allotment for the rebuild is part of a request of over $8 billion to fund the U.S. Department of Transportation’s emergency relief efforts to repair and reconstruct highways and roads in more than 40 states and territories that have been seriously affected by disasters, including hurricanes Helene and Milton in the Southeast.
Road to recovery: In late August, the Maryland Transportation Authority awarded a $73 million design phase contract to construction giant Kiewit Infrastructure Co. for the first phase of the rebuild. The contract is a down payment on what is expected to be at least a $1.7 billion project to open a new highway crossing to traffic over the Patapsco River by 2028.
5 — Maryland’s impending FAMLI Program: What employers need to know now
The Maryland Department of Labor has released proposed regulations to implement the state’s paid family and medical leave insurance (FAMLI) law. The FAMLI law will provide benefits to workers in the state who take leave from employment for certain medical and family care reasons starting July 1, 2026. Proposed employer responsibilities may include creating and maintaining an online account with the FAMLI Division for reporting contributions; responsibility for 100 percent of contributions, but can withhold up to 50 percent from employees’ wages (small employers with fewer than 15 employees have reduced contribution obligations); and notifying employees about FAMLI leave and benefits at hire, annually as well as when an employee’s leave may qualify for FAMLI.
Important dates: Employers will start payroll deductions for the FAMLI program on July 1, 2025, remitting the first payment to the state on Oct. 1 of next year. And as stated above, benefits will be available to employees beginning July 1, 2026.
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The Maryland Chamber of Commerce is the state’s leading business advocacy organization — committed to working with our alliance of partners on critical public policy issues. With a focus on economic development and grassroots advocacy, we impact policies that directly affect Maryland business.
