Maryland lawmakers ended the legislative session Monday night, approving a $67 billion budget that includes $1.6 billion in tax and fee increases, as well as cuts to erase a structural deficit.
State legislators faced a $3.3 billion deficit and hundreds of millions in cuts from the Trump administration.
The approved budget includes a 3% IT services tax and increases in marijuana and online sports betting taxes.
“We did, in fact, leave here with that deficit closed and a cash cushion to be able to weather the ongoing storm from what [President Donald] Trump and [Elon] Musk are doing to Maryland's economy, Democratic House Majority Leader David Moon said.
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The state's wealthier residents also will pay more. Two new tax brackets will apply to those who make $500,000 per year and $1 million or more — a so-called millionaires tax.
Gov. Wes Moore says 94% of Marylanders will either see a cut in their income taxes or they'll stay the same. But lawmakers also provided for local jurisdictions to impose a 0.1% "piggyback" tax on income.
“There are sacrifices that we are asking some Marylanders to make, but again, it's for the benefit of the overall state economy," Moon said.
The budget was condemned by Republican party leaders, who criticized the tax increases, including a $5 fee on each new tire purchased in the state
"This represents the largest tax hike in Maryland history — a staggering burden on working families, small businesses and retirees already struggling with inflation and economic uncertainty,” the Senate Republican Caucus said in a statement.
Lawmakers say they've yet to realize the full scope of how cuts from the Trump administration could affect the state. Legislative leaders haven't ruled out the possibility of a special session if the cuts are too deep. A panel will monitor federal actions and provide updates to legislators to prepare them to respond to decisions in the nation’s capital.
“From public education, to health care and our federal workforce, we have already witnessed how recent federal actions threaten the economic stability of our state," Maryland House Speaker Adrienne Jones, a Democrat, said. "We know these threats will continue after the General Assembly’s 2025 legislative session adjourns.”
Moore also noted concerns about continuing challenges that the heavily Democratic state faces from actions taken by the Trump administration, from federal job cuts to tariffs.
The governor described the Maryland revenue increases as tax reform that spares the middle class and brings tax cuts for many, while asking more of high-income residents. He said the state budget reductions were “the largest amount of cuts that you've seen in a Maryland state budget in 16 years.”
“We are continuing to deliver for the people of the state, particularly at a time when we're seeing so much chaos coming from Washington, D.C.,” Moore told reporters Monday.
Republicans, who are outnumbered in both the House and Senate, have repeatedly noted that Maryland has been facing a big deficit since before Trump regained the White House in January. They criticized the tax increases and fees, noting a variety of them relate to vehicles and will affect anyone who drives.
“We could have done it differently,” said Del. Jesse Pippy, a Republican and the House minority whip, who said the budget could have been balanced without tax increases. “I think the taxpayers would have appreciated a different course of action.”
Here is a look at some of the highlights of legislation lawmakers have sent to the governor's desk:
Immigration enforcement
A bill that would have banned police agencies from cooperating with Immigration and Customs Enforcement through the so-called 287(g) program failed to pass, but lawmakers did pass legislation creating guidance around ICE access to schools, hospitals, places of worship and other spaces.
Energy package
Lawmakers passed a package of measures aimed at addressing energy needs, including initiatives to generate more power from nuclear, natural gas, solar and battery storage. It also includes a small rebate on state ratepayers’ electric bills, with two installments adding up to an average of about $80.
Abortion funding
The Maryland Department of Health would have access to $25 million for an abortion grant program to help providers pay costs for the uninsured. The money comes from part of the federal Affordable Care Act that has collected fees from insurers to pay for abortion services for their policyholders.
Health care for young adults
Lawmakers approved a measure to make permanent a program that provides subsidies to help young adults get affordable health insurance.
Prescription drugs
A state board would have its authority expanded to set upper price limits for prescription drugs statewide, instead of only for state and local governments.
Second Look Act
People convicted of a crime between the ages of 18 and 25 who have served 20 years or more of a prison sentence would be able to petition for a reduction in sentence if they have not been sentenced to life without the possibility of parole or are a sex offender. The bill does not apply to offenders convicted of killing first responders.
Criminal records
Many more state residents would be able to expunge criminal records after completing their sentences. The measure also will require the state to automatically shield records from public view for roughly 175,000 people who were pardoned by the governor last year for minor cannabis convictions.
Slavery reparations
A statewide commission would study and recommend potential reparations for slavery and the lingering effects of racial discrimination.
Sex abuse lawsuits
Future liabilities from claims of sexual abuse at state and private institutions would be limited with caps on settlements from $890,000 to $400,000 for cases filed after May 31 for state institutions and from $1.5 million to $700,000 for private institutions.
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