Gov. Wes Moore is proposing an income tax hike on the wealthiest 18% of Marylanders — while offering modest tax relief to others — as part of his plans to close a nearly $3 billion gap in the state’s budget.

He’ll also limit spending on a variety of programs in the budget that he’s proposing Wednesday in Annapolis. The proposal is the starting point for what could be intense negotiations with state lawmakers over the next three months, a key test for the Democratic governor.

Moore told The Baltimore Banner that it’s important for the state to invest in quality schools, safe infrastructure and other priorities, but those things cost money.

“I think being asked to pay a little bit more is something that I’m actually OK with,” Moore said in an interview. “And I believe that a lot of us Marylanders who have done very well and who have really benefited from being a Maryland resident, would agree with me.”

Moore counts himself in the category of Marylanders who would pay more taxes under his plan. He acknowledged he’s done the math, but declined to share how much more he’ll pay.

Under the proposal, the state would establish two new tax brackets. Individual earnings beyond $500,000 would be taxed at 6.25% and earnings above $1 million would be taxed at 6.5%. The state would also add a 1% surcharge on capital gains taxes for the next four years.

At the same time, the state would consolidate the lowest four tax brackets and double the standard deduction that earners take on their tax returns. Those changes would offer an average benefit of $173 per household.

Two-thirds of Maryland households would see an income tax cut, Moore administration officials said.

For businesses, there would be a cut in the corporate tax rate, but the state also would institute a reform called “combined reporting” that applies to how companies with subsidiaries calculate their taxes.

Between raising taxes on high earners and offering the small tax break for others, the state would see a net gain of $819 million, Moore administration officials said. That goes a long way to closing the projected nearly $3 billion budget gap.

Republicans have warned against raising taxes on high earners, saying it might chase away Marylanders to other states. Moore said he’s not concerned, because he thinks wealthy Marylanders value the services that state government provides.

The Moore administration is referring to the cuts in planned spending as “cost containment” measures. They include capping participation in the state’s child care subsidy program, slowing expansion of Moore’s service program for young adults, requiring local governments to pay more for various programs that are jointly funded with the state and cutting funding for higher education.

There also would be adjustments to the Blueprint for Maryland’s Future, a multi-year ambitious plan to improve the state’s public schools. As Moore has already indicated, he wants to pause a program to give teachers more out-of-classroom time for planning and training. The state also would freeze grant funding for community schools, which offer additional services to students and their families in high-need areas.

Moore’s proposal is the starting point for negotiations with lawmakers, who have some latitude to cut money and move it around within the budget. They also could propose their own tax or fee changes. Lawmakers’ review will begin in earnest next week.

This is a developing story.