SUN: Maryland Democrats’ first test for 2027: Can they lower costs as promised?

After consistently campaigning on affordability, Maryland Democrats are facing an early test of whether they can deliver on that promise: how can they ease costs for residents while addressing a projected $3 billion budget shortfall that has put tax and fee increases on the table?

The choices lawmakers make in the coming session could affect Marylanders’ taxes, access to state services and the cost of programs they rely on. At the same time, the state must close a projected $3 billion budget gap and pass a balanced budget, as required by law.

House Majority Leader David Moon, a Montgomery County Democrat, said some of the relief Democrats hope to provide depends on action in Washington, including restoring federal funding for Medicaid and the Supplemental Nutrition Assistance Program (SNAP). He also pointed to the war in Iran as a factor driving up gas prices.

At the state level, Moon said Democrats want to expand the list of medications eligible for price caps and change tax rules so some large corporations, including Amazon, pay more in state income taxes.

“Some of these corporations have plenty of customers in Maryland, but are paying little to no income tax,” Moon said. “Questions about this are going to return.”

Moon said state leaders are prepared for legal challenges to new tax measures, pointing to the state’s experience with a digital advertising tax that the Maryland Tax Court struck down. The case put more than $500 million in projected revenue at issue.

Republican lawmakers said Democrats’ affordability promises would be difficult to meet without changing the state’s spending priorities.

Senate Minority Whip Justin Ready, a Republican who represents parts of Carroll and Frederick counties, said Democrats’ affordability message was little more than a campaign talking point.

“It’s a bit laughable when they say we’re running on affordability,” Ready said. He argued that the state should scale back scheduled spending increases for The Blueprint for Maryland’s Future and withdraw from renewable energy programs that he said are burdening ratepayers.

Other Republicans said lawmakers should rule out broad tax and fee increases during the coming legislative session. Among them was Sen. Jason Gallion, a Republican who represents parts of Cecil and Harford counties.

“Marylanders have already been asked to shoulder enough of the burden for Annapolis’s spending decisions,” he said.

Maryland’s economic reality

Democrats have blamed the state’s fiscal pressures in part on billions of dollars in lost federal funding and inflation, while Republicans argue that state leaders have spent beyond their means.

Lawmakers cut almost $1 billion from state programs to address a $1.4 billion shortfall during the 2026 legislative session, including $127 million from the Developmental Disabilities Administration, which provides healthcare services for individuals with intellectual and developmental disabilities.

Ahead of the 2027 legislative session, the Maryland Department of Budget and Management asked cabinet-level agencies to identify 10% cuts in their budget proposals. House Minority Leader Jason Buckel, an Allegany County Republican, said the exercise was worthwhile and argued that even 1% or 2% cuts across agencies would not significantly affect services.

“The question is: Do Democratic leaders and Wes Moore have the political will to do that?” Buckel said.

Lawmakers are also considering whether to raise certain taxes and fees, while county leaders are pushing for greater authority to set their own property tax rates.

What economists say

A day after winning reelection, Gov. Wes Moore told reporters Wednesday that the state “will address affordability.” He did not rule out tax or fee increases as part of that effort.

“The problem that the governor faces is it’s not going to be next year that he’s going to be able to turn around the economy to reinvest,” said Daraius Irani, chief economist at the Regional Economic Studies Institute at Towson University.

Kali Schumitz, vice president of external relations for the Maryland Center on Economic Policy, said the organization plans to advocate for closing corporate tax loopholes as one way to raise revenue. She also pointed to state projections showing general fund revenues increasing by 3.3% in fiscal 2028.