Maryland Faces $3 Billion Budget Shortfall
Lawmakers weigh tax and fee increases as the state heads into its 2027 legislative session with a projected gap.
Updated on Nov. 9, 2026 in Legislative Policy
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As of November 9, 2026, Maryland Democrats face a projected $3 billion budget shortfall heading into the 2027 legislative session, and lawmakers are considering tax and fee increases to close the gap. The state must pass a balanced budget as required by law.
Why it matters
Maryland residents, agencies and local governments will feel the effects of how the state closes the gap, whether through program cuts, new taxes or fees. Democrats have blamed the state's fiscal pressures in part on billions of dollars in lost federal funding and inflation.
The state's projected $3 billion shortfall is roughly three times the $1.4 billion gap lawmakers closed in 2026 by cutting almost $1 billion from state programs, including $127 million from the Developmental Disabilities Administration. Which revenue measures lawmakers will ultimately adopt has not been determined.
The players
Wes Moore
Wes Moore is the Governor of Maryland, who has said the state will address affordability and has not ruled out tax or fee increases.
Maryland Department of Budget and Management
The Maryland Department of Budget and Management is the state agency that asked cabinet-level departments to identify 10% cuts in their budget proposals.
Maryland Tax Court
The Maryland Tax Court is the state court that struck down a digital advertising tax, putting more than $500 million in projected revenue at issue.
The details
The Maryland Department of Budget and Management has asked cabinet-level agencies to identify 10% cuts in their budget proposals. Separately, Maryland's Tax Court struck down a digital advertising tax, putting more than $500 million in projected revenue at issue, while Gov. Wes Moore has said the state will address affordability and has not ruled out tax or fee increases.
Timeline
2026 legislative session: Lawmakers cut almost $1 billion from state programs to address a $1.4 billion shortfall.
Ahead of the 2027 legislative session: Budget agencies are asked to identify 10% cuts in their proposals.
2027 legislative session: Lawmakers are expected to address the budget gap and affordability.
Fiscal 2028: State projections show general fund revenues increasing by 3.3%.
Legislative Context
The projected $3 billion gap is roughly three times the $1.4 billion shortfall Maryland closed in the 2026 session through nearly $1 billion in program cuts. Counties are also pressing for greater authority to set their own property tax rates as the state weighs revenue options.
Maryland residents could see changes in state services or new taxes and fees depending on how lawmakers close the shortfall. County property tax authority is also under discussion, which could affect local bills.
The takeaway
The 2027 session will show whether Maryland relies on further program cuts, new taxes and fees, or a mix of both to close a gap that is larger than the one closed last year.
What happens next
Lawmakers are expected to take up the budget gap and affordability questions during the 2027 legislative session.
Further reading
For broader background, see Legislative Policy coverage of Maryland.
Source note: This article includes information reported by WBFF.
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