Maryland’s top budget officials on Friday approved a new estimate of how much money the state expects to bring in over the next two fiscal years. Despite small amounts of predicted growth, the projections are largely unchanged from earlier forecasts, and officials warn that cuts and uncertainty from the federal level continue to threaten the state’s economy.
The Board of Revenue Estimates, which helps set the state’s budget expectations, voted to adopt updated general fund revenue projections of $26.8 billion in fiscal 2026 and $27.2 billion in fiscal 2027 — about a 4.1% and a 1.4% increase from this fiscal year’s revenue, respectively.
The general fund, the state’s main checking account that pays for core services such as education, health care and public safety, includes money Maryland collects that isn’t dedicated to a specific purpose, such as income taxes, sales taxes, lottery revenue and corporate taxes.
The projections are only slightly higher than what officials predicted in their most recent forecast in September, adding about $90.7 million to the next fiscal year’s estimate and about $9 million to the following fiscal year.
“Maryland is certainly currently meeting its revenue expectations, but it’s important to acknowledge that those expectations … were lowered due in part to challenges created by our own federal government,” Lierman said, pointing to the record-breaking government shutdown and President Donald Trump’s administration’s elimination of thousands of federal jobs across the country since the last meeting. She added that these changes have hit Maryland’s economy especially hard because of the reliance on federal workers and contractors.
The state collected about $75 million above September’s projections as of the end of October, according to Board of Revenue Estimates Executive Secretary Robert Rehrmann. He said the state’s withholding and sales tax revenue remain “resilient” despite slowing wage growth and fewer federal dollars flowing into Maryland. Stronger-than-expected estate tax collections — the tax on transferring property after someone’s death — and higher interest income, the income a person receives from certain bank accounts or from lending money to someone else, also are helping lift the forecast.
Still, Rehrmann, who directs the board’s Bureau of Revenue Estimates, warned that several risks remain: missing state-level employment data due to the federal government shutdown and uncertainty tied to major federal and state tax changes, including Trump’s One Big, Beautiful Bill. Corporate income tax collections, which are paid by corporations on their profits, are the weakest performer so far this year. But Rehrmann said it’s too soon to know whether that signals real economic trouble or simply reflects timing issues tied to recent tax changes.
Comptroller Brooke Lierman said Maryland’s solid top-line numbers mask deeper affordability problems. Nearly 39% of Maryland households fall into the “ALICE” category, an acronym that stands for “asset limited, income constrained and employed” — meaning they earn above the poverty line but are unable to cover basic expenses — despite the state’s nation-leading median household income. Rising housing costs, higher reliance on credit and slowing discretionary spending are all signs of stress, she said.
Acting Budget Secretary Jake Weissmann, attending his first meeting in the role since he was appointed by Gov. Wes Moore in October, said federal policy decisions “purposely harm Marylanders” and reiterated that Moore’s upcoming budget will require “hard choices” to protect core programs.
Maryland State Treasurer Dereck Davis emphasized that the key takeaway from the forecast is “a slowdown in growth expected in calendar year 2026” and “uncertainty remains over federal policy actions.”
“We can never decouple [federal policy actions] from our planning and what we do. At any given moment, a tariff will pop up, or somebody will be sanctioned,” Davis said. “We won’t have a shutdown next year. Everybody’s up for election, and while they will jeopardize our well-being, they won’t jeopardize their own … but everything else is just at the whim of Washington and and we’ll adjust accordingly.”
The forecast approved Friday is the final revenue update before Moore submits his budget proposal to the General Assembly, which must close a projected $1.4 billion shortfall. In Maryland, the governor typically delivers their spending plan early in the legislative session to give lawmakers time to review and adjust it, though a balanced budget is required by adjournment. Moore unveiled his fiscal 2026 budget on Jan. 15, and the session’s interim calendar indicates that Jan. 21, 2026, is his final day to submit the upcoming budget bill. It remains unclear what spending reductions it may contain, although last month he ruled out tax increases.
The vote comes as lawmakers prepare to return to Annapolis for the 2026 legislative session, beginning Jan. 14, and just over a week after outgoing House Speaker Adrienne A. Jones announced she would step down. Del. Joseline Peña-Melnyk — a Prince George’s and Anne Arundel County Democrat who chairs the House Health and Government Affairs Committee — has emerged as the frontrunner and sole candidate for the speakership. Moore has called a special session for Dec. 16 to elect Jones’ successor.
Despite the fiscal uncertainty and federal headwinds, Davis praised the “great leadership” in Annapolis under Moore and Senate President Bill Ferguson, who was renominated this week. Davis added, “And Speaker Peña-Melnyk … if everything we’re hearing is correct,” saying the trio would keep Maryland on stable financial footing.
“They’ll do a good job of guiding and keeping us on the course,” Davis said. “The bills will be consistently paid, and they will be paid on time.”
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