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
We intend to regularly share updates throughout the 2025 session. In the meantime, if there’s anything our office can do to assist you or your family, please don’t hesitate to contact us. You can call or email the office at 410-841-3590 or johnny.mautz@senate.state.md.us. It is a great honor and privilege to serve in the Maryland Senate, thank you for your support and input.
