Maryland’s Budget Problem Is Back, and So Is the Tax Question

Gov. Wes Moore will not rule out additional taxes or fees in 2027; Maryland taxpayers know all to well what that means!

Marylanders have heard this movie before.

There is a budget problem. Annapolis says the numbers are difficult. State leaders promise they are protecting working families. Then somebody reaches for the tax code.

That does not mean Gov. Wes Moore has announced another tax increase. He has not. But when he was recently given several opportunities to rule out additional taxes and fees during the 2027 legislative session, he declined to make that promise.

For taxpayers, that is the part worth remembering.

Maryland is heading toward another difficult budget debate, and Moore is wisely, at least from a governing standpoint, keeping his options open. The problem is that those “options” affect people who are already paying registration fees, utility bills, housing costs, grocery bills, and just about everything else that seems to cost more than it did a few years ago.

Moore has a defense.

His administration says the FY2026 budget included significant spending reductions and income-tax changes designed to benefit most Maryland taxpayers. According to the governor’s office, the administration cut more than $2 billion from the budget, describing it as Maryland’s largest budget reduction in 16 years. The final income-tax package, the administration says, resulted in 94 percent of Maryland taxpayers either receiving an income-tax cut or experiencing no change.[1]

That deserves inclusion in any fair discussion.

But so does the other side of the ledger.

The 2025 budget legislation included a collection of tax and fee changes affecting transportation, business activity and consumer purchases. Legislative budget documents included provisions involving vehicle registration fees, vehicle excise taxes and other revenue measures.[2]

So when Maryland officials say many taxpayers received an income-tax cut, they may be correct. When critics say Marylanders are also paying higher taxes or fees elsewhere, they can also be correct.

That is why people tune out when politicians start talking about “tax relief.”

Maryland families do not organize their monthly budgets around categories created by the Department of Budget and Management. They know what leaves their checking account.  Maryland families frankly can’t afford another round of tax hikes from the whims of the Governor and Democrats in Annapolis.

If their income tax falls by a few dollars while their registration fee, electricity bill, insurance premium, and other costs rise, they do not feel particularly relieved.  Maryland families are still recovering from the reckless days of the Joe Biden government that made everything more expensive.  Then, on top of that, Democrat Wes Moore and the Democrats in Annapolis, on a whim, raise taxes and fees, why? Because they can!   They know they have supermajorities in both houses,, and they act as a rubber stamp for every new spending whim.

Moore claims he inherited a serious fiscal challenge and has repeatedly acknowledged it. Never mind the fact that Gov. Hogan left him with a massive surplus in the billions.  Which he blew through, =liek a fat kid at an all-you-can-eat buffet. His FY2026 budget proposal confronted what the administration described as a roughly $3 billion deficit. It proposed about $2 billion in cuts while restructuring portions of Maryland’s tax system.[3]  

Maryland cannot tax its way into enduring wealth.  Economic growth matters.

Moore himself has stressed the need to make Maryland more competitive, attract businesses, expand the workforce and grow the tax base. That is the right conversation.

The harder question is whether Maryland can control spending growth fast enough to match that economic strategy.

Education commitments, health programs, transportation needs, employee costs and other obligations do not disappear because lawmakers would prefer not to raise taxes.

That is where the 2027 session could become uncomfortable.

Moore’s FY2027 budget proposal notably contained no tax or fee increases and maintained an 8 percent balance in the state’s Rainy Day Fund.[4] But future structural gaps remain the concern, which explains why reporters keep asking the governor what comes next.

His answer, essentially, is: We will see.

Politically, that may be understandable.

For taxpayers, it is not especially comforting.

Maryland does not need another annual ritual where lawmakers discover a budget shortfall and immediately start searching couch cushions, businesses, and motorists for additional revenue.

Maryland needs to address the longer-term conversation about what state government can afford, what programs produce measurable results, and which ones don’t.  Moore administration needs to take a page out of the Ehrlich or Hogan playbook.  Grow the tax base, not the tax!!!

Legitimate disagreements remain over where those cuts should fall and which programs deserve protection.  Perhaps Maryland needs their version of a Gramm-Rudman law.  Make the cuts or automatic cuts go into effect.

But one principle should not be controversial.

Government cannot permanently spend faster than its revenues grow.

Eventually the math wins.

And when Maryland’s budget writers return to Annapolis in January, taxpayers will be observing carefully to see who they expect to pay the bill.

---

Endnotes

1. Governor Moore Signs FY 2026 Budget and Legislation to Modernize State Government During Final 2025 Bill Signing Ceremony
https://governor.maryland.gov/news/press-releases/governor-moore-signs-fy-2026-budget-and-legislation-modernize-state-government-during-final-2025

2. Budget Reconciliation and Financing Act of 2025, HB 352/SB 321 Summary
https://mgaleg.maryland.gov/Pubs/BudgetFiscal/2025rs-budget-docs-BRFA-Summary.pdf

3. Governor Moore Releases Moore-Miller Administration FY 2026 Budget Proposal
https://governor.maryland.gov/news/press-releases/governor-moore-releases-moore-miller-administration-fy-2026-budget-proposal

4. Announcing Our FY 2027 Budget Proposal
https://governor.maryland.gov/news/speeches/announcing-our-fy-2027-budget-proposal

5. Budget Highlights, Fiscal Year 2026
https://dbm.maryland.gov/budget/Documents/operbudget/2026/proposed/FY2026MarylandStateBudgetHighlights.pdf

Aaron Ackerman is a contributor at Direct Line News, where he writes on governance, accountability, and Maryland politics

About The Author