After $1.6 Billion Tax Hike, Wes Moore Won’t Rule Out More

Maryland Gov. Wes Moore refuses to rule out another round of tax and fee increases next year, just over a year after signing a budget package containing more than $1.6 billion in new taxes and fees.

Asked whether he would commit to no new tax or fee increases during the 2027 legislative session, Moore declined to make that promise.

The timing is significant. Maryland lawmakers already turned to taxpayers in 2025 to help close a multibillion-dollar budget deficit. Now, the state’s own projections show the underlying problem is coming back.

Maryland’s Spending Affordability Committee projects a $2.7 billion structural deficit in fiscal year 2028. That shortfall is projected to grow to roughly $3 billion in 2029 and $3.7 billion in 2030. In other words, Maryland raised taxes and still has another multibillion-dollar hole coming.

The 2025 tax package was substantial.

The Moore-backed Budget Reconciliation and Financing Act of 2025 added two new individual income tax brackets. The state rate now rises to 6.25% for single filers earning more than $500,000 and 6.5% above $1 million. For joint filers, those thresholds are $600,000 and $1.2 million.

Maryland counties and Baltimore City can impose another 3.3% local income tax. That pushes the combined top state and local income tax rate as high as 9.8%.

Lawmakers also imposed an additional 2% tax on certain net capital gains for taxpayers with federal adjusted gross income above $350,000. For Marylanders already paying the highest state and local rates, the combined Maryland tax burden on affected capital gains can reach 11.8% before federal taxes are even considered.

The package did not stop at income.

Maryland imposed a new 3% sales tax on certain information technology and data services, increased the sports wagering tax from 15% to 20%, raised taxes on cannabis, and enacted several vehicle-related tax and fee increases.

Moore has continued to emphasize the income tax cuts included in the package. His administration says 94% of Maryland taxpayers received either an income tax cut or no change. But lowering one taxpayer’s income tax bill does not erase taxes imposed somewhere else.

Maryland businesses now have to collect the new IT tax. Drivers face higher costs. Investors face a new capital-gains surcharge. Sports betting and cannabis face higher rates. Those costs do not disappear simply because another portion of the tax code was reduced.

Worse, one of the new taxes has already failed to deliver what Annapolis expected.

Maryland projected that its new IT services tax would generate roughly $482.8 million in its first year. Collections came in at only about $112.8 million, $370 million below the original estimate.

Lawmakers were warned this could happen. The Department of Legislative Services acknowledged before enactment that businesses could cancel taxable purchases, move purchases outside Maryland, or bring IT functions in-house in response to the tax.

Senate Minority Leader Stephen Hershey attempted to repeal the tax earlier this year through an amendment to the 2026 Budget Reconciliation and Financing Act. The amendment failed 20-24.

Instead of reversing course, Maryland could soon find itself debating another round of tax increases. The state’s fiscal projections explain why.

General fund costs associated with the Blueprint for Maryland’s Future are projected to increase rapidly over the next several years. According to the Spending Affordability Committee, general funds needed to support Blueprint costs rise from zero in 2027 to approximately $1.57 billion in 2028 and $3.43 billion by 2031.

That is a spending problem, not a lack-of-taxing problem.

Maryland already has some of the highest income tax burdens in the country. It has already raised taxes on income, capital gains, technology services, vehicles, sports betting, cannabis, and other activities. And one of those new taxes has already badly missed its revenue forecast.

Yet when Moore was given the opportunity to promise Maryland taxpayers that Annapolis would not come back for more, he couldn’t do it. “We’re going to continue to focus on how we’re going to make life more affordable for the people of our state,” Moore said when asked about future tax increases.

That is not a commitment to keep taxes from going higher.

Maryland lawmakers should spend the 2027 legislative session addressing the spending commitments driving the state’s structural deficit, not searching for another group of taxpayers to finance them.

After last year’s tax increases, Marylanders should not have to wonder how much more Annapolis plans to take next.