Latest news with #MarylandBudget
Forbes
9 hours ago
- Business
- Forbes
Maryland Institutes Hiring Freeze And Buyouts To Remedy $121 Million Gap
LANDOVER, MARYLAND - JUNE 7: Maryland Gov. Wes Moore goes to greet guests during a campaign event ... More 2024 in Landover, Maryland. (Photo by) Governor Moore, who advocates for recruiting fired federal workers, now faces the challenge of retaining his state government employees due to Maryland's budget shortfall. In just a few days, beginning July 1, the state of Maryland will institute a state hiring freeze (of sorts) and offer voluntary employee buyouts to employees nearing retirement or otherwise eligible to accept the state government buyout offer. Governor Moore announced the hiring freeze and funding predicament. Moore announced Tuesday that the state will implement a hiring freeze for fiscal year 2026 (from July 1, 2025, through June 30, 2026) in response to the "historical fiscal challenge' that the current economy and budget present. Governor Moore stated that his administration is 'committed to engaging with our public sector unions as we work through these difficult decisions. We are moving with care and intentionality to minimize impact on current employees and be transparent throughout the process.' A union representative for Maryland's public service workers indicates that the union has remained in communication with the governor's office and will continue to advocate for resources for union workers. Some key tenants for the hiring freeze and buyout plan. State government leaders express that the administration will act with transparency and intentionality so as to limit confusion, minimize disruptions and avoid public service delays and interruptions for taxpayers. Basically, the administration intends to fix the budget shortfall by using a soft-hand approach with hiring, personnel and operational matters. The key tenants of the plan are as follows: Wes Moore's chief of staff clarifies details about the hiring freeze. Moore's chief of staff, Fagan Harris, discussed the plan for moving forward to remedy the budget shortfall while simultaneously recruiting and hiring skilled new workers for priority roles. During the interview with WTOP News on Wednesday, Harris clarified a few key points about the administration's plans. Regarding it being an actual full-blown hiring freeze, Fagan Harris says: Regarding buyouts and collaboration with unions, Harris says: Regarding continuing to recruit and hire federal workers while dealing with a $121 million budget shortfall, Fagan Harris says: The messaging from the Moore administration is that they intend to identify and remedy inefficiencies and eliminate vacant positions where possible so as to limit the negative impact to services and programs as well as current government employees and citizens. Recommended reading: New Federal Hiring Freeze End Date And Hiring Restrictions Nail The Interview: Answer 'Why Should We Hire You' Like A Pro How Long Will The Federal Hiring Freeze Last? Implications For Government Employees
Forbes
11-06-2025
- Business
- Forbes
The United Kingdom's Cautionary Tale For Maryland Governor Wes Moore
Maryland Governor Wes Moore (Photo by) The United Kingdom's capital gains tax rate rose from 18% to 24% in April. The subsequent drop in capital gains tax collections following last year's announcement of that tax hike, however, might end up serving as a portent of the unintended consequences that could be coming to Maryland, where Governor Wes Moore (D-Md.) recently enacted a new budget that raises taxes on wage and capital gains income. 'According to data from HM Revenue & Customs, capital gains tax (CGT) receipts fell to £13 billion in the 12 months to March 2025, down 10% from £14.5 billion in the same period last year,' the Times of London reported on April 25. The drop in capital gains tax collections is attributed to a pause in asset sales and 'a trend of high-net-worth individuals leaving the UK.' Governor Wes Moore approved a new budget in May that raises the state tax on capital gains and also imposes higher tax rates on wage income. Governor Moore's first budget raises personal income tax rates for some Marylanders by as much as 13%, taking the top rate from 5.75% to as high as 6.5%, depending on income level. Some Maryland residents, meanwhile, are hit with a more than 47% increase in their state capital gains tax rate. A May 21 RSM report summarizes the tax hikes in Maryland's new budget: 'Effective July 1, 2025, and applicable to taxable years beginning after Dec. 31, 2024, the budget legislation creates two new individual income tax brackets on high earners. Individual filers with income between $250,001 and $500,000 will remain subject to the tax at a rate of 5.75%. Individuals with taxable income of $500,001 through $1 million will be subject to a new rate of 6.25%, and taxable income exceeding $1 million will be subject to a rate of 6.5%. Joint filers with income between $300,001 and $600,000 will remain subject to the tax at a rate of 5.75%. Joint filers with income between $600,001 and $1,200,000 and joint filers with income in excess of $1,200,000, will be subject to the new 6.25% and 6.5%, respectively.' 'Additional individual tax changes include a new 2% tax on capital gains over $350,000, and individual taxpayer itemized deductions are reduced by 7.5% of the excess of federal adjusted gross income over $100,000 for married individuals filing separately, or over $200,000 for all other filers,' the report added. In addition to the income tax hikes, the new Maryland budget also includes a provision allowing local officials to raise county income taxes from 3.20% to 3.30%. Even before recent developments in the U.K., Europe was already awash with examples of failed efforts to target the wealthy with higher taxes. 'The experiment with the wealth tax in Europe was a failure in many countries,' National Public Radio's Planet Money conceded in 2019. 'France's wealth tax contributed to the exodus of an estimated 42,000 millionaires between 2000 and 2012, among other problems,' prompting French President Emmanuel Macron to repeal the tax in 2019. 'In 1990, twelve countries in Europe had a wealth tax' Planet Money added. 'Today, there are only three: Norway, Spain, and Switzerland. According to reports by the OECD and others, there were some clear themes with the policy: it was expensive to administer, it was hard on people with lots of assets but little cash, it distorted saving and investment decisions, it pushed the rich and their money out of the taxing countries—and, perhaps worst of all, it didn't raise much revenue.' Governor Moore didn't need the new reminder from Europe about the negative unintended consequences that have followed previous attempts to target upper-income households with higher tax rates. Governor Moore's predecessor, Martin O'Malley (D-Md.), already provided such a cautionary tale. Then-Governor O'Malley (D) hiked Maryland's top income tax rate in 2007 to 6.25% temporarily for all household earnings above one million dollars. There were fewer Marylanders who reported earning more than one million dollars, however, in the years subsequent to O'Malley's soak-the-rich tax increase. In fact, a 2009 Wall Street Journal editorial reported that a third of Maryland's million dollar-plus earners had disappeared from the tax rolls in the year following Governor O'Malley's top rate hike. 'In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April,' the Wall Street Journal noted. A year later, however, that number had shrunk to 2,000, with the state comptroller's office calling it a 'substantial decline.' 'On those missing returns, the government collects 6.25% of nothing,' the Journal added. 'Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.' Other such cautionary tales have been documented recently. Stanford researchers, for example, found a similar trend following voter approval in 2012 of Proposition 30, which raised California's top marginal income tax rate. Governor Moore's staff, in addition to challenging the premise that the tax hikes enacted by Governor O'Malley chased millionaires out of Maryland, expressed confidence that the new state budget will put Maryland on a better path. 'After years of economic stagnation, it was clear Maryland had much to accomplish to undo the economic underperformance seen from 2017 to 2022,' noted Carter Elliott, senior press secretary for Governor Moore. 'During that time, Maryland's economy flatlined while the rest of the country grew.' 'Governor Moore worked with the leaders of the general assembly this session to turn this year's long-forecasted deficit into a $315 million surplus, all while providing 94% of Marylanders with a tax cut or no change in their income taxes,' Elliott added. 'The governor also ensured to preserve 8% in Maryland's rainy day fund —more than the recommended amount.' The experience in Washington State and Massachusetts could provide Governor Moore and his team reason to be optimistic. After the recent imposition of a 7% capital gains tax in Washington and new 9% income tax rate for upper-income households in Massachusetts, the number of millionaire filers in both states have thus far not declined. While Governor Moore and Maryland legislators are raising taxes on capital gains and wages, they are an outlier. Most states have been moving in the opposite direction for years, a trend that has continued in 2025. Governors and lawmakers in Oklahoma and Mississippi, for example, enacted legislation this year that will completely phase out their state income taxes over time. The South Carolina House also passed legislation this spring to phase out their income tax, which the state Senate will take up in January. More recently, the Republicans who run the Ohio Senate will soon pass a new state budget that moves the state from two income tax brackets with a top rate of 3.5%, down to a single rate of 2.75%. 'There are 14 states that have a flat tax,' said Ohio Senate President Rob McColley (R), who many consider a top contender to be Ohio's next Lieutenant Governor. 'This budget maintains our commitment of reducing the tax burden on Ohioans over the last several General Assemblies.' 'These tax cuts further our pro-growth agenda that has been paying off for Ohio in the last few years,' Senate Finance Committee Chairman Brian Chavez (R) added. 'These cuts not only reward our hardworking taxpayers with the breaks they deserve, they serve as magnets to our state for businesses from all over the world, as we have seen with high-tech companies flocking to Ohio.' Not only have many governors and legislatures taken steps to reduce, flatten, and even fully phaseout state income taxes, many lawmakers have had success when it comes to improving the tax treatment of investment income in their states. A few weeks before Governor Moore raised Maryland's capital gains tax, for example, Missouri lawmakers passed a bill phasing out their capital gains tax. Days after Missouri lawmakers made their state the first to repeal its capital gains tax, Texas lawmakers took steps to ensure they'll never have a capital gains tax, referring a constitutional amendment to the ballot that would prohibit the institution of a capital gains tax. Texas already has a similar constitutional prohibition on taxing wage income. 'Voters will vote on this to ensure that we're not going to have a capital gains tax in Texas,' Governor Greg Abbott (R) said after signing the joint resolution on May 14 to refer the capital gains tax ban to the ballot. Governor Abbott is set to further improve the Lone Star State's business tax climate when he signs Senate Bill 2206, legislation now on his desk that extends and strengthens the state's franchise tax credit for research and development costs. The recent actions by Governor Abbott, Governor Kevin Stitt (R-Okla.), Governor Tate Reeves (R-Miss.), and their counterparts in many other states underscore the fact that not only is Maryland a relatively small state, it's also a fiscal policy outlier that is not indicative of the direction in which most states are heading when it comes to tax reform.
CBS News
20-05-2025
- Business
- CBS News
2026 Maryland budget among bills being signed into law by Gov. Moore
Maryland's 2026 budget will be among more than 160 bills that will be signed into law Tuesday by Gov. Wes Moore. The nearly $67 billion spending plan was crafted to address the state's $3 million deficit and the impact of federal funding cuts. What does Maryland's 2026 budget include? The 2026 state budget includes about $1.8 billion in tax and fee increases. It includes the largest amount of cuts to state spending in 16 years. Gov. Moore has been vocal about his plan to increase taxes for the highest earners in the state. His budget will create two new tax brackets: One for those who make $500,000 per year and another for those who make $1 million per year. Under the budget, residents who make $500,000 will be taxed at 6.25% and those who make $1 million will be taxed at 6.5%. Low- and middle-income residents will see tax breaks under the 2026 budget. The budget will also create a new 3% tax on IT services and increase taxes on cannabis and sports betting. Lawmakers agreed to make about $2.3 billion in cuts from the 2026 budget. "Because of our emphasis on growth, our biggest framework will emphasize spending cuts over tax increases," Gov. Moore said. 164 new bills signed into Maryland law On Tuesday, Gov. Moore will sign a total of 164 bills into Maryland law, including a few that focus on the rising cost of energy in the state. For example, the Renewable Energy Certainty Act will allow for the construction of solar energy generating systems and will launch a Power Plant Research Program to propose site and design requirements. The Next Generation Energy Act will also be signed into law on Tuesday, allowing the Department of Housing and Community Development to issue loans and grants aimed at reducing greenhouse gas emissions from residential buildings. The law will also require the Maryland Energy Administration to work with neighboring states and federal agencies to develop new nuclear energy stations. The governor will also sign the Lowering Prescription Drug Costs for All Marylanders Now Act, a law that will expand Maryland's Prescription Drug Affordability Board and allow it to determine ways to lower drug prices. One of the bills signed Tuesday focuses on immigration laws in the state. The Maryland Values Act prevents federal law enforcement from carrying out immigration actions at sensitive locations such as schools and libraries. The law, which will go into effect on June 1, 2025, will also require the attorney general to develop guidelines for immigration enforcement at sensitive locations.
