Friday Five
Feb. 28, 2025 | This week's latest on Maryland business and government
1 — Governor Moore pitches tax plan, Republicans say it’s a ‘bad deal’ for Maryland
Governor Moore pitched his tax reform proposal directly to lawmakers yesterday during a joint hearing with members of the House of Delegates, stating that his plan to raise $1 billion in new tax revenue will help resolve a $3 billion deficit and is designed to give most filers a modest tax cut and encourage business growth. Republicans and business groups that make up the loudest opposition to Moore’s budget, meanwhile, argue that the tax plan that will put a squeeze on Marylanders.
Quoted: Maryland Chamber President & CEO Mary Kane says the combination of phasing out key tax credits, expanding corporate taxes through a method known as combined reporting and increasing personal income taxes — which some businesses use instead of the corporate rate — “could do serious harm to Maryland’s business community.” Kane and others have applauded Moore for stressing that the core of Maryland’s budget problem is its poor economic growth. But they say his strategies for improving it are not enough.
2 — Senate warns of $500 million more in budget cuts, ahead of likely ‘disastrous’ federal action
Senate leaders said the legislature is preparing for as much as $500 million in additional cuts to an already strapped fiscal 2026 budget, as they brace for federal reductions and look to rework Gov. Wes Moore’s tax proposals. “We do believe in the next couple of weeks we will get a better picture as to the extent of the, honestly, disastrous cuts that are likely going to be shifted to the states ahead of the March 14 shutdown date,” Senate President Bill Ferguson explained.
What's to come: Lawmakers face a time crunch as delayed revenue estimates push back the budget handoff, likely missing the March 31 deadline. This will trigger an extended session unless they fast-track negotiations. Federal uncertainty is adding to the budget planning challenge.
3 — How a new tax plan could cost Marylanders even if your rate doesn’t rise
Trying to solve a $3 billion deficit, Governor Moore released a budget proposal that included some cuts but also raised taxes on wealthier individuals in Maryland. “Maryland’s own comptroller has said that the economy in Maryland is largely stagnant and has been for more than five years now,” Pete Sepp said, president of the National Taxpayers Union. “Raising taxes on any portion of Maryland’s population is only going to make that problem worse." Sepp also said states such as New Jersey, who similarly raised taxes on the wealthiest, eventually expanded those hikes to more income levels.
Capital mobility: Raising taxes on high earners could also push individuals and businesses to leave the state for neighboring Virginia, Delaware or Pennsylvania. “Capital is very mobile,” Sepp added. “It’s not that difficult for a business, especially a small or a medium sized business, not to mention large corporations, to simply make the decision that it’s not worth it being located in Maryland.”
4 — Maryland residents want a menu of energy generation options, poll shows
Part of an Institute of Politics at the University of Maryland, Baltimore County poll, released Wednesday, found that Marylanders support a menu of power sources from solar and wind to natural gas and nuclear. Expansion of coal-burning plants, however, is not among the options favored in the survey, with just 42 percent of those surveyed supporting coal. Other options for expanding energy generation included wind at 70 percent; use of trash incinerators, 68 percent; geothermal, 63 percent; and nuclear, 51 percent.
Diversified power: Amid rising utility bills across several regions of the state, Marylanders seek a variety of power sources, according to Mileah Kromer, a pollster and director of the Institute of Politics. More than six people in 10 who were surveyed said “addressing the costs of household energy bills was a high priority for them."
5 — Poll: Majority of Marylanders say they have considered exiting the state
In part three, released yesterday, of the same poll conducted by the Institute of Politics at the University of Maryland, Baltimore County, a majority of Marylanders said they have considered moving from the state in the near future even though they believe it is a good place to raise children. Those surveyed expressed concerns with the state’s business climate, job market and friendliness toward retirees. When asked if they had ever considered moving from Maryland, 53 percent of respondents said yes.
Job availability: The poll of 803 Maryland residents painted a mixed picture when participants were asked how the state fairs when finding a good-paying job. Thirty-three percent rated the state as fair with 35 percent calling it good. Another 17 percent rated Maryland as poor; 11 percent said excellent.
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