Maryland Gov. Wes Moore declined to rule out another wave of tax and fee increases during the 2027 legislative session, just over a year after approving a budget package with more than $1.6 billion in new taxes and fees, according to a report published by Americans for Tax Reform. When asked if he would commit to avoiding any new tax or fee increases, Moore refused to make that pledge. The report finds that despite last year's massive revenue boost, the state faces another round of multibillion-dollar budget gaps driven by rising education spending.
The state's Spending Affordability Committee forecasts a $2.7 billion structural deficit in fiscal year 2028, climbing to roughly $3 billion in 2029 and $3.7 billion in 2030. The 2025 tax package created two additional individual income tax brackets, raising the state rate to 6.25% for single filers earning above $500,000 and 6.5% above $1 million—with thresholds of $600,000 and $1.2 million for joint filers. Maryland counties and Baltimore City can add another 3.3% local income tax, pushing the combined top rate as high as 9.8%. Lawmakers also imposed an extra 2% tax on certain net capital gains for taxpayers with federal adjusted gross income exceeding $350,000, meaning Marylanders paying the highest state and local rates face a combined Maryland tax burden on affected capital gains reaching 11.8% before federal taxes. The package included a new 3% sales tax on certain information technology and data services, increased the sports wagering tax from 15% to 20%, raised cannabis taxes, and enacted several vehicle-related tax and fee hikes.
According to the report, Moore's administration says 94% of Maryland taxpayers received either an income tax cut or no change. However, the report emphasizes that reducing one taxpayer's income tax bill doesn't eliminate taxes imposed elsewhere—Maryland businesses must now collect the new IT tax, drivers face higher costs, investors face a new capital-gains surcharge, and sports betting and cannabis face elevated rates. One of the new taxes has already fallen dramatically short of expectations: Maryland projected its new IT services tax would generate roughly $482.8 million in its first year, but collections came in at only about $112.8 million, missing the original estimate by $370 million. Senate Minority Leader Stephen Hershey tried to repeal the tax earlier this year through an amendment, but the effort failed 20-24.
The report explains that the state's fiscal projections reveal why another tax increase may be coming. General fund costs tied to the Blueprint for Maryland's Future are set to surge rapidly over the next several years—rising from zero in 2027 to approximately $1.57 billion in 2028 and $3.43 billion by 2031, according to the Spending Affordability Committee. The Department of Legislative Services warned before enactment that businesses could cancel taxable purchases, move purchases outside Maryland, or bring IT functions in-house in response to the tax. The report characterizes this as a spending problem rather than insufficient taxation, noting Maryland already carries some of the highest income tax burdens in the country and has already raised taxes across multiple categories.
When asked about future tax increases, Moore said, "We're going to continue to focus on how we're going to make life more affordable for the people of our state"—but that statement isn't a commitment to keep taxes from rising. The report concludes that Maryland lawmakers should spend the 2027 legislative session tackling 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 shouldn't have to wonder how much more Annapolis plans to take next.