ANNAPOLIS, Md. — Maryland lawmakers are considering a 2.5% sales tax on services between businesses that could generate nearly $1 billion.
The proposal comes as state leaders decide which measures to take to balance the state's budget.
"As we look toward the long-term sustainable funding for things like public safety, education, health care, transportation we need to have a tax system that recognizes the economic reality in the state of Maryland," said Senate President Bill Ferguson.
The Senate President is warning that any more cuts to the budget and we could see major impacts to vulnerable Marylanders.
"We know that we've gotten to a place where the next round of cuts are incredibly dramatic. Kicking up to 100,000 people off medicaid, firing 1,600 teachers so these are the questions right now. The last thing that we in the Senate want to do is consider revenues at all but if it means eviscerating our social safety net it has to be on the table," said Ferguson during a weekly meeting with reporters.
Republican leadership is firing back calling the proposal bad for businesses.
"Unfortunately, this is just another example of a policy that solidifies Maryland as one of the most unfriendly states for businesses. This new tax will put Maryland businesses at a distinct disadvantage to competitors in other states while driving up their operating costs," said Senate Minority Leader Stephen Hershey in a statement.
The state will learn more on Thursday.
The Bureau of Revenue Estimates is sharing its projections for the impacts from the Trump administration's changes.
Then a clearer picture will come when congressional republicans finalize their budget.
