Governor Wes Moore presented his proposed Fiscal Year 2026 state budget for the Moore-Miller Administration this week. With a clear goal to encourage economic growth and manage the state’s $2.7 billion deficit, Gov. Moore’s proposal includes a plan to generate economic growth in Maryland and tax code reforms. These tax code reforms will increase individual income tax rates on higher earners and increase maximum standard deductions, thus lowering the tax burden on low and middle income earners. His proposal also lowers the corporate income tax rate while implementing a form of combined reporting, which will bring in additional revenue. Combined reporting has been discussed for several years in the General Assembly and last year the House passed combined reporting legislation. In addition, the Governor’s budget plan increases the tax rates on table games and sports wagering, but steers clear of increasing sales taxes or State property taxes. To generate transportation revenue, the budget plan imposes a retail delivery fee of $0.75 cents on orders subject to the sales tax, limits trade in allowances, and increases vehicle emissions fees.
“We’ve got to invest in industries we know are going to help us win the decade because in 2030, I want us to look back and see a state that finally applied itself….I want us to look back and see a state that finally applied a strategy to economic development,” Governor Moore said. “In 2030, I want to look back and see an economy that grew faster than anyone expected. In 2030, I want us to look back and see good-paying jobs in leading industries of the future.”
The Governor’s budget presentation emphasized the “two storms” Governor Moore has been driving home for the past several weeks, that speak to the current financial climate of Maryland. The presented path forward highlights four priorities: growing our economy, strengthening our labor force, modernizing government, and fixing what is broken in our current tax system. In addition, the overall mission boils down to “building an economy that grows the middle class and gives everyone a pathway to work, wages, and wealth.” Moore’s budget announcement also highlights the challenges we have faced in past years that are lingering today including economic underperformance, lagging employment, and our state’s stagnant revenue. The proposed budget intends to flip the projected cash shortfall to a positive cash ending balance; prioritize investments for education, public safety, and growing the economy; reducing the overall General Fund operating expenses by $274 million; and an attempt to reduce the structural deficit for FY 2026 by $2.25 billion.
Additional budget details can be found below:
Budget Highlights Fiscal Year 2026
