Maryland’s state budget grows more grim with a new projection of $280 million added to the shortfall in expected revenue for 2025 and 2026. The state’s deficit for 2026 could balloon to $3.2 billion, with some officials warning it may reach $6 billion by 2030. The driving force behind this crisis - federal job and grant cuts.
As the Maryland General Assembly and Governor Wes Moore negotiate to balance the fiscal 2026 budget, the stakes are high. The impact of these financial constraints is exacerbated by proposals from the Trump Administration and congressional Republicans to overhaul entitlement programs such as Medicaid, SNAP, and potentially Social Security. Adding to the uncertainty, the looming threat of a federal government shutdown could send shockwaves through Maryland’s workforce. The Board of Revenue Estimates projects that at least 11,000 federal jobs could be lost, with another 17,000 at risk, including contractors and nonprofit employees.
Governor Moore has proposed new revenue measures, including a delivery fee and increased gambling taxes. Meanwhile, legislators have introduced a 2.5% tax on business services, aiming to generate $1 billion in revenue. However, the question remains: Who will bear the brunt of these financial challenges?
With federal cuts, Maryland faces tough choices. For too long, the burden of balancing the budget has fallen on workers, through furloughs, increased benefit costs, staffing shortages, stagnant wages, and the loss of retiree prescription plans. It would be unconscionable to ask them to make even more sacrifices while the wealthiest individuals and large corporations continue to evade paying their fair share.
AFT Maryland, in collaboration with the Fair Share Coalition, is advocating for a more equitable approach to revenue generation. HB 1014/SB 859, the Fair Share for Maryland Act of 2025, is a crucial step toward tax fairness.
In our testimony on the bill, we made our stance clear:
We support altering the state income tax rate to ensure that those with higher income pay their fair share of taxes. The bill’s provision to impose an additional state income tax rate on net capital gains is a necessary move toward progressive taxation.
Corporate tax reform is long overdue. The bill mandates that corporations compute their Maryland taxable income more transparently and allows for the filing of combined tax returns for certain corporate groups. These measures will help ensure tax compliance, simplify the tax code, and that businesses contribute fairly to Maryland’s economy.
Maryland must address its budget crisis in a way that prioritizes fairness and economic justice. The Fair Share for Maryland Act of 2025 presents a solution that asks the wealthiest individuals and large corporations to contribute their fair share—rather than shifting the burden onto working families.
AFT Maryland remains steadfast in our commitment to advocating for policies that protect public sector workers, fund essential services, and promote a more just and equitable economy. As budget negotiations continue, we will keep pushing for solutions that build a stronger Maryland for all.
Join us in demanding that Maryland’s budget is balanced in a way that reflects fairness, shared responsibility, and economic justice.
2025-03-02
Article by AFT Maryland staff