November 18, 2025

Maryland’s fiscal footing is unsustainable | GUEST COMMENTARY

Maryland’s economy is losing altitude. Just three years into Gov. Wes Moore’s term, the state faces deep budget deficits despite inheriting a record surplus from eight years of disciplined fiscal management under Gov. Larry Hogan. That surplus was quickly spent on mandated programs like the Kirwan Blueprint for Education and thousands of new government hires — leaving taxpayers with the bill.

Even after passing the largest tax increase in state history to “fix” the problem, Gov. Moore and the Democratic supermajority have not stabilized the budget. State analysts still project multi-year shortfalls because spending continues to grow faster than revenue. Meanwhile, Maryland is losing — losing residents and employers — to other states.

The latest economic report from the comptroller confirms what many Marylanders already feel — people and jobs are moving to states that make it easier to live and work. This trend erodes our tax base and weakens our long-term competitiveness.

The recent federal government shutdown only underscored how vulnerable Maryland’s economy has become. About 13% of our workforce is employed by the federal government or its contractors, and the state consistently ranks among the highest in federal dollars received. When Washington sneezes, Maryland catches a cold.

Gov. Moore has said he wants to grow the private sector to reduce the state’s dependence on federal spending. But his and his party’s policies have had the opposite effect. New taxes and regulations have raised costs for employers and made it harder to expand or hire.

One of the clearest examples is the Paid Family and Medical Leave (FAMLI) program, passed over Gov. Hogan’s veto in 2022. Every employer and worker in Maryland must eventually pay into this new fund, creating what amounts to a statewide payroll tax. The program’s costs and bureaucracy have already forced a two-year implementation delay, pushing it to 2027.

To close this year’s budget gap, the Moore administration approved a new 3% sales tax on computer and digital services. This so-called “Tech Tax” will hit nearly every business that relies on technology, raising prices for both employers and consumers. Even state agencies will pay more because every IT contract now includes an extra 3%.

Another measure, the “High Earners Tax,” raised rates on those making $500,000 or more without protecting small business owners who report pass-through income. Lawmakers sold it as a tax on Wall Street, but it lands squarely on Main Street — the small and midsize employers who reinvest profits into hiring and growth.

Instead of taking on the structural problems they’ve created in Maryland, the Democratic majority in Annapolis continues to rely on policies that discourage private investment and grow government.

Senate and House Republicans have put forward a different approach — one focused on reducing the cost of living, becoming more competitive and fiscally responsible.

Our caucus has proposed repealing the FAMLI payroll tax and rolling back the recent increases in licensing and regulatory fees that make it harder to start or advance in a profession. We successfully delayed FAMLI’s implementation for two years, sparing workers, employers and taxpayers hundreds of millions of dollars. Now is the time to put this bad idea on ice for good.

In the upcoming legislative session, we will push to repeal the Tech Tax and other job-killing provisions that make Maryland less competitive. The Tech Tax, in particular, sends a clear signal to businesses that Maryland is a high-cost, low-return environment — while generating relatively little revenue for the state.

We will also continue working to stop expensive energy mandates that drive up costs for families and small businesses. Electrification requirements and similar policies increase construction and renovation costs without clear economic or environmental benefits.

Maryland can’t build a sustainable future on tax hikes and federal dependency. Real growth comes from private enterprise — from people who invest, hire and innovate. That means creating an environment that rewards those choices rather than punishing them. It’s time to realign state policy around that goal and give Marylanders a more stable, affordable and prosperous future.

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