Maryland Senate President Bill Ferguson is pessimistic about the chances of granting Baltimore leaders’ plea to let the city create a 2% sales tax on top of the state’s 6% sales tax rate.

“I think that’s probably a very challenging one to see moving forward this year,” said Ferguson, a Baltimore City Democrat. “In the scope of where we are in the state level, that seems like a very, very unlikely proposal this year.”

Bigger priorities spurred by deficits in Annapolis and Baltimore seem to be stalling the political will to enact the proposed city sales tax. The state is facing a well-documented $3 billion budget deficit this legislative session.

In Baltimore, widespread overspending within city agencies during the 2024 fiscal year forced the city to burn through a $53.85 million surplus to balance its budget. Much of the spending was driven by an excessive demand for overtime due to staffing shortages, most notably within the Baltimore City Fire Department.

The city is now staring down an $11.4 million deficit in the first quarter of fiscal year 2025, Baltimore Mayor Brandon Scott’s office told The Sun on Wednesday.

Scott’s administration argues that the proposed new sales tax could generate up to $200 million for the city.

“By providing Baltimore with the opportunity to generate its own revenue through a local sales tax, Maryland would be aligning its tax policy with Virginia, Pennsylvania, New York, North Carolina and many other states,” Faith Leach, the city’s chief administrative officer, said during a state House hearing Tuesday.

Leach says the city would use 1% of the money generated to provide tax relief for residents and reduce the vacant housing crisis through a $1,000 property tax rebate and rental assistance. Baltimore officials have long argued that the lack of a sales tax to generate revenue has contributed to the city’s high property taxes and pushed people outside the city.

“What we’ve calculated is with 1% of the sales tax, which is about $70 million, we would be able to do a flat, across-the-board $1,000 rate relief for all of the homeowners,” Leach said during Tuesday’s hearing.

But lawmakers like state Sen. J.B. Jennings, a Republican representing Baltimore and Harford counties, see it differently. Jennings calls local sales taxes “regressive” and argues that residents could travel outside the city to buy cheaper products without the burden of a new sales tax.

“People who have the option will drive to Baltimore County or stay in the County instead of driving to the City,” Jennings said in an emailed statement. “If this moves forward, it could serve as an unintended boost for Baltimore County — which I wouldn’t complain about — but I think Baltimore City should rethink this for the economic health of their residents and small businesses.”

Hannah Gaskill contributed to this report. Have a news tip? Contact Carson Swick at cswick@baltsun.com.