2026 Maryland budget among 164 bills signed into law by Gov. Moore

Maryland's 2026 budget was among 160 bills that were signed into law Tuesday by Gov. Wes Moore. 

The nearly $67 billion spending plan was crafted to address the state's $3 billion deficit and the impact of federal funding cuts. 

The state budget will take effect on July 1, when the fiscal year begins, meaning that Marylanders could start seeing changes by the summer.  

What does Maryland's 2026 budget include? 

With this balanced 2026 state budget approved, Marylanders may have to shell out more for certain goods and services.

The budget includes about $1.8 billion in tax and fee increases. It also includes the largest amount of cuts to state spending in 18 years. 

Gov. Moore said 94% of Marylanders will see a tax cut or no change to their income taxes. He also said difficult cuts were made, which he called a victory.

"We turned a $3 billion inherited deficit into a surplus, while still reserving 8% in the rainy day fund above the recommended levels," Gov. Moore said. "We made over $2 billion in targeted cuts, which was hard, but it's the largest amount of cuts that we've seen from a Maryland budget in 18 years."

The state's leading Democrats said the General Assembly took the deficit and turned it into a $2.4 billion cash reserve and surplus.

Which Maryland programs could be impacted?

Lawmakers said the budget has targeted spending on services, including restoring some of the proposed cuts to the Developmental Disabilities Administration, funding Medicaid for 1.5 million residents, a 7.3% increase in education spending, and other economic growth initiatives.

There are also cuts across state departments and agencies, including some employee positions being eliminated and money from other programs going to the state's general fund, according to The Baltimore Banner.

There were significant changes to Moore's proposed budget from January. 

The ENOUGH Act, a program he initiated that sends grants to neighborhoods with high concentrations of child poverty, is getting millions less in funding than the governor had hoped, according to The Banner.

How will Maryland's new tax bracket system work?

Republicans, however, said this is not a moment to celebrate. They are concerned with the state's new tax bracket system. 

Those who make $500,000 per year will be taxed at 6.25%, while those making $1 million will be taxed at 6.5%. Currently, Marylanders who make over $250,000 are taxed at 5.75%. They fear small business owners will be hurt by this and may take their companies elsewhere.

"The proposals that went through as part of this budget raise taxes on the very people that invest in and own the small and medium businesses that will help our jobs grow," said Sen. Justin Ready, who serves as the Minority Whip and represents District 5.

New state fees implemented in Maryland budget

While some taxes aren't going up, the state is also adding several new fees. 

There will be a 3% tax on IT and data services (not including mobile phone service), a new 2% tax on capital gains for people with income over $350,000, and an increase in the cannabis and sports betting taxes. Additionally, vending machine snack sales will be subject to a 6% sales tax.

For transportation funding, a $5 fee on every new tire purchased will be coming in 2026, and the state is accelerating its plan to raise car registration rates. The excise tax on vehicles will also increase by 0.5%.

Filers making more than $200,000 will also have a limit on how many itemized deductions they can make on their tax return.

"People are just being crushed with this high cost of living. It's not any one thing. It's the combined weight of all of it that really is hurting working families and these small businesses and job creators," Ready said.

How will Maryland's budget impact businesses?

Some Maryland businesses are worried about the unknown impact of these fees, but they know for sure, they don't want to have to raise prices.

"I try to be the least expensive place that someone can spend money when they come visit downtown Annapolis. I cringe every time I have to raise prices. I don't want to do that," said Sveinn Storm, owner of Storm Bros. Ice Cream Factory in Annapolis.

164 new bills signed into Maryland law 

Gov. Moore signed a total of 164 bills into Maryland law on Tuesday, including a few that focus on the rising cost of energy in the state. 

For example, the Renewable Energy Certainty Act allows for the construction of solar energy generating systems and will launch a Power Plant Research Program to propose site and design requirements. 

The Next Generation Energy Act allows the Department of Housing and Community Development to issue loans and grants aimed at reducing greenhouse gas emissions from residential buildings. 

The law also requires the Maryland Energy Administration to work with neighboring states and federal agencies to develop new nuclear energy stations. 

The governor also signed the Lowering Prescription Drug Costs for All Marylanders Now Act, a law that will expand Maryland's Prescription Drug Affordability Board and allow it to determine ways to lower drug prices. 

One of the bills signed Tuesday focuses on immigration laws in the state. 

The Maryland Values Act prevents federal law enforcement from carrying out immigration actions at sensitive locations such as schools and libraries. 

The law, which will go into effect on June 1, 2025, will also require the attorney general to develop guidelines for immigration enforcement at sensitive locations.