ANNAPOLIS, Md. — Around lunchtime, Maryland’s governor and Democratic leaders walked down the stairs of the statehouse to announce they had reached an agreement on the 2026 budget. A budget that began the session with a deficit of more than $3 billion.
“Our biggest framework will emphasize spending cuts over tax increases,” Governor Wes Moore told a crowd gathered in the statehouse hallway.
Moore was joined by Senate President William Ferguson (D-Baltimore City) and House Speaker Adrienne Jones (D-Baltimore County). The three presented their proposed plan for 2026.
“I want to announce we have agreed to take a number of things off the table,” Ferguson told the audience.
He went on to say that sugary drinks, sales tax increases, and property tax increases are not on the table. But he stated that the state will levy a new tax.
“(It will be) on data and IT services at half the rate of the current sales tax,” Senator Ferguson had said.
The budget will raise taxes on capital gains for the wealthiest Marylanders, among other tax increases and fees, but the Governor promises:
“94% of Marylanders will either get a tax cut or no change on their income tax,” the state’s governor stated.
WUSA9 inquired whether this was the final menu of tax increases Marylanders would see, or if the state would raise taxes again next year or the year after.
“We are always going to make sure we are protecting Marylanders,” Governor Moore responded. “I have said before I have a very high bar when it comes to how we think about taxes, but I also know this: tax reform is incredibly important.”
On the other side of the budget, Moore stated that the state will cut roughly $2.3 billion.
“This is the largest amount that has been cut from the Maryland state budget in years,” he informed me.
We were told it was a combination of entitlements, staff reductions, and funding, but during the press conference, leaders were vague.
A reporter inquired, “Can you give us an example of one?”
“Vacancy reductions is a great one,” Sen. Guy Guzzone (D-Howard County) said.
The Maryland Republican leadership then weighed in on the plan.
“Very few details offered,” Republican Del. Jesse Pippy of Frederick County stated. “I guess we will have to see what is brought up in committee today.”
Republican leaders also stated that they have had little, if any, input on the cuts or taxes.
“We learned about this at the same time you did,” Upper Shore Republican Senate Minority Leader Steve Hershey stated.
Hershey stated that while they welcome cuts, the new taxes, particularly technology taxes, will harm Maryland in the long run.
“(Governor Moore) is gonna put a tax that is first in the country on those types of services!” said the candidate. “We just don’t think that’s the way to go if that’s how you’re gonna grow the economy and grow businesses here in Maryland.”
On Thursday afternoon, all committees had the opportunity to review the budget cuts and taxes. The committees must vote on it by tomorrow. The budget can then be voted on by the full House and Senate.
Its chances of passage are good, given the General Assembly’s Democratic supermajority.
