Maryland raises costs for drivers, smokers to curb projected deficits -

The Maryland General Assembly passed a budget this session that raises approximately $340 million in additional revenue for transportation and education programs, and increases funding for the state’s shock trauma system. But not every Marylander will foot the bill.

Most of the increases come in the form of vehicle-related fees and fines, which will be used to pay for trauma care and transportation projects. A chunk of new tax money for education will largely come from tobacco users.

The compromise among Democrats, who control the legislature, comes after two weeks of contentious debate over how to pay for expenses lawmakers had already taken on. House leaders wanted more increases, Senate leaders wanted fewer. Lawmakers ultimately opted to modestly increase revenue largely through fees without raising income tax, general sales taxes or corporate taxes, or by creating a tax on online poker.

Gov. Wes Moore (D), who in January proposed a budget balanced with cuts and no major tax increases, said he was pleased with where lawmakers landed.

“I’m going to have a very high bar when it comes to revenue increases, and specifically when it comes to things that are impacting working families,” he said Monday as the General Assembly held its final day of the session.

The legislature did not address how the state will pay for future transportation costs and looming expenses associated with its signature education program — known as the Blueprint for Maryland’s Future — beyond fiscal 2027.

Here’s how the new taxes and fees will affect some Marylanders’ pocketbooks in June:

Drivers will pay more

Maryland drivers will pay more to buy a vehicle and use the roads.

All drivers who register a vehicle in Maryland will have to pay an additional $23 surcharge each year — or $46 every two years — when their registration comes due. That money will more robustly fund the Trauma Physician Services Fund, the shock trauma system and the Maryland Emergency Medical System Operations Fund.

Registration fees will also be rising to generate nearly $169 million in new revenue, with heavier vehicles costing more than light ones.

Share this articleShare

“Higher-weighted vehicles put more wear and tear on our roads and should be paying a higher fee, in effect a user fee, for the maintenance of those roads,” said House Appropriations Committee Chairman Ben Barnes (D-Prince George’s) at a news conference last week.

Shoppers looking for a new car should keep their eyes open for an $800 dealer processing charge on their bill of sale — a fee that was previously capped at $500. That fee is negotiable at the dealership, but virtually all car salespeople will initially include it in a vehicle sale. That $800 will be added to the total sale price, which the state then taxes at 6 percent. If you agree to pay the $800 fee, you will end up paying more in tax, too.

For those who purchase an electric vehicle, the price goes up even more. The owners of plug-in electric vehicles will have to pay an additional $125 surcharge every two years when they renew registration. Plug-in hybrid drivers will pay a $100 surcharge. Barnes said those new electric-vehicle fees are “tantamount to what you would pay in gas tax,” if you drove a gas-powered car.

Speed in a work zone, and you may pay more for it

In a bid to raise revenue and also to protect roadside construction crews, the fines for drivers who speed in work zones will be going up from the current $40 fine. And the more you speed, the more you’ll pay.

Drivers who cruise through work zones at 12 to 15 miles per hour over the limit will be fined $60. Those who drive 16 to 19 miles per hour over the limit will pay $80. For 20 to 29 miles per hour over the limit, a ticket will cost $140. Those who whip by at 30 to 39 miles per hour over the limit could incur a $270 ticket. And for speeding by 40 miles per hour or more, a ticket could cost $500.

If workers are present in the zone at the time of the violation, those ticket costs can be doubled.

Cigarettes, vapes and chewing tobacco will be pricier

Smokers and smokeless tobacco users will see the cost of cigarettes, vapes and chewing tobacco rise after the state raises the sales tax on virtually all tobacco products.

The sales tax on a pack of cigarettes will increase by $1.25, to $5 per pack. The sales tax on electronic cigarettes and vapes will rise from 12 percent to 20 percent. And other tobacco products will be taxed at 60 percent of wholesale price, up from 53 percent.

The higher sales tax on tobacco products is expected to generate about $91 million in new revenue for the Blueprint in fiscal 2025. Budget projections estimate that new revenue will decrease each year because fewer people will buy more-expensive tobacco products, but the plan is expected to fully fund the Blueprint through fiscal 2027.

ncG1vNJzZmivp6x7uK3SoaCnn6Sku7G70q1lnKedZLGkecydZK%2BZX2d9c4COaWtoaGlkuqK%2B2KWYp5xdp66qv8SsZK2ZqJrAbr%2FMqKKeqqNiw6a0yJyjnqtf