ANNAPOLIS, Md. — As the 2026 Maryland legislative session approaches, state leaders are wrestling with budget projections that are shaping policy discussions and signaling potential impacts for communities across Southern Maryland. Maryland’s fiscal 2026 general fund is expected to total roughly $26.9 billion in spending, a slight decline from the year before, even after lawmakers and the governor adopted measures intended to bring the budget into balance.
Despite those actions, analytic forecasts have continued to show pressure on the state’s bottom line. In late 2024, state budget analysts projected a nearly $3 billion shortfall for fiscal 2026 before any corrective actions were adopted, the largest gap in at least two decades and one that represented more than 11 percent of planned operating costs if unaddressed.
To stabilize the budget last year, lawmakers and Gov. Wes Moore’s administration enacted a mix of about $1.6 billion in spending cuts, nearly $1.2 billion in new tax and fee revenue and more than $800 million in other budget moves, including transfers and reserve use. Tax changes included a 3 percent sales tax on data and IT services, increases in personal income taxes and capital gains surcharges, and higher rates on cannabis and sports wagering…