Mandated Funding Makes Tax Reform Difficult

Speaking before business leaders at Stevenson University’s Maryland Rising economic development forum, House Speaker Mike Busch discussed the challenges of tax reform in the State. He stated that he wouldn’t rule it out, but that mandated funding for education and Medicaid make it difficult.

As reported by the Baltimore Business Journal,

Maryland’s state general fund budget is roughly $16.2 billion, Busch said. More than $6 billion of that is mandated to go to K-12 education. If the state doesn’t set aside enough for education, it leaves itself open to lawsuits.

The state also has federal mandates for funding programs like Medicaid. And it must fund higher education and community colleges, Busch said. He argued higher education is crucial to attracting talent.

Speaker Busch also commented on Maryland’s income tax structure.

Busch described Maryland’s income tax as high. But he said that’s because the state’s income tax structure has counties piggybacking on the state’s taxes in a setup originally designed to relieve pressure on property taxes. Property taxes, Busch said, are low in Maryland compared to many states.