Maryland faces $3 billion budget shortfall requiring action

Maryland state lawmakers are facing a projected $3 billion budget shortfall. The state must balance its budget, which means it cannot spend more than it collects. The funds come mainly from various taxes imposed on citizens. Maryland taxes include income, property, sales, and specific taxes on items like gas, cigarettes, and alcohol. It also has unique taxes, such as a digital advertising tax. According to the Tax Foundation, Maryland ranks low for tax competitiveness. David Williams from the Taxpayers Protection Alliance warns that high taxes could drive people and businesses out of the state. When residents leave, the remaining taxpayers face increased taxes, potentially leading to a fiscal crisis. Smokers in Maryland pay a high excise tax on cigarettes, generating significant revenue for the state. In addition, alcohol taxes bring in more funds, making tobacco and alcohol important for the state's budget. There are proposals for new taxes, such as on sugary drinks, although these may not pass this year. Governor Wes Moore has acknowledged that the state’s tax system needs improvement. To address the budget gap, Maryland may raise taxes or cut spending. However, the current political environment suggests tax increases are more likely. New mandates for local governments could also increase their tax burdens. Despite the deficit, Governor Moore plans to hire 5,000 new state employees, which will add costs. This decision raises concerns about fiscal responsibility, as it could significantly impact taxpayer dollars. Overall, Maryland's political landscape is heavily dominated by Democrats, who have control over state and local governance. Many citizens are concerned about government spending and taxation, but political changes seem unlikely in the near future.