This update was provided by:
Johnny Mautz, Maryland State Senate District 37
The release of Governor Moore’s Operating Budget was the highlight from this past week in Annapolis. Here are a few items which we thought might be of interest to you:
FY26 Budget Highlights
- Governor Moore’s FY26 Budget $67.3 billion FY26 budget proposal represents a 1% spending increase over last year, and includes $987 million in new or increased taxes, fees, and assessments.
- This year, the House of Delegates will work on the budget first, and the Senate will then work on the version of the budget they pass.
- The Governor’s submittal falls short of the SAC Recommendation to eliminate the projected $2.5 billion structural deficit.
- Investments in economic development – Sunny Day Fund and Trade Point Atlantic
- Doubles money for climate reduction plans from $90 million to $180 million. All climate money is for wind and solar.
- Level funding ($122 million) for local police funding.
- $200 million reduction in Developmental Disabilities Administration
- $2.5 billion in adjustments to Blueprint over five years.
- $400 million in childcare scholarships
- $9.7 billion for K-12 education
- Rainy Day fund stays at 8%
Taxes & Fees
- Increases the standard deduction and applies it to all households regardless of income BUT creates two new income tax brackets for high-income earners.
- Reduces Corporate Income Tax rates from 8.25% to 7.99% but implements combined reporting.
- Cannabis Tax is increased from 9% to 15%
- Casino table game tax rate increased from 20% to 25%
- Establishes a four-year surcharge on capital gains income over $350,000
- Eliminates the inheritance tax BUT lowers the estate tax exemption from $5 million to $2 million.
- Creates an online retail delivery fee of 75 cents on deliveries subject to the sales tax.
- Increases emissions fee from $10 to $30 and the emissions late fee from $15 to $30
- Establishes an Administrative Fee if you pay your vehicle registration costs through installments
- Caps Vehicle Trade-In Allowance
- Expedites the implementation of last year’s increases in vehicle registration fees.
- Establishes a 0.15% Unemployment Insurance Administrative Fee
- Increases in Medicaid Hospital Assessment by $139 million
