Top Maryland Democrats on Thursday announced an agreement on a “framework” for the state’s budget that slashes government spending but also includes tax hikes for high earners and a new tax on information technology services.

The agreement was reached following weeks of behind-the-scenes negotiations among top Democrats about how to solve a multibillion-dollar shortfall.

With the 90-day General Assembly session in its final weeks, the announcement from Gov. Wes Moore, House of Delegates Speaker Adrienne A. Jones and Senate President Bill Ferguson represents progress. But their “framework” agreement still left many details to be ironed out before the legislature adjourns on April 7.

Features of the budget now moving forward include:

• Increasing income tax rates on individual earnings above $500,000 to 6.25% (up from 5.75%) and above $1 million to 6.5% (up from 5.75%). Moore said the increase for affected Marylanders would average $1,800.
• Establishing a 3% tax on information technology and data services, generating nearly $500 million.
• Increasing taxes on cannabis sales, to 12% from 9%.
• Increasing the tax on sports betting, to 20% from 15%.
• Increasing in the standard deduction that individuals can claim on their taxes by 20%, to $3,350 for individual taxpayers and $6,700 for those filing jointly.
• Continuing to allow taxpayers to itemize deductions on their taxes, but limiting how much can be deducted for those earning more than $200,000.
• Adding a 2% surcharge on capital gains income of more than $350,000, with a portion of the money funding transportation.
• Applying the 6% sales tax to vending machine sales.
• Increase the excise tax on vehicles to 6.8%, from 6%.
• Setting a maximum local income tax rate of 3.3% to be charged by counties and Baltimore City, up from the current limit of 3.2%.

The leaders said during a joint State House news conference they also found $500 million more in cuts to government spending, though they would not provide any details on what that would include. They did say that the Developmental Disabilities Administration, which had been targeted for cuts in Moore’s original budget, would see its funding restored.

With the new and increased taxes coming in — about $1.6 billion, according to analysts — and the cuts, the state would end up with a balanced budget with some money left over.

The state would have a cushion of about $350 million, plus a Rainy Day Fund balance of about $2 billion, according to Del. Ben Barnes, chair of the House Appropriations Committee.

Some unpopular proposals that had percolated in Annapolis were not included in the deal, including a 75-cent fee on home deliveries such as Amazon and GrubHub; a tax on sodas and sugary drinks; a broad-based 2.5% tax on business-to-business services; and eliminating income tax itemizing altogether.

The Democratic leaders sold their agreement as representing tough decisions necessitated by the actions of President Donald Trump, whose administration has been slashing federal government jobs and spending — causing negative economic effects in a state where federal employees and contractors are a key segment of the economy.

But the budget gap existed before Trump took office, with the state’s balance sheet reflecting a $3 billion difference between revenues coming in and planned spending — a gap that grew by $300 million after Trump’s actions.

Moore proposed a $67 billion budget in January that closes the gap by a combination of tax increases and spending cuts. But the Trump administration actions led to lawmakers looking for more cuts and more ways to raise money.

“No one up here wants to talk about cuts. No one up here wants to talk about revenues,” said Jones, a Baltimore County Democrat. “But responsible governing means having the tough conversation.”

Moore boasted that the amount of cuts represent the largest level of budget cutting in 16 years, also using the term “responsible governance.”

“While we’ve watched dysfunction and chaos from Washington, here in Annapolis, we’ve been working together,” Moore said. He added that Maryland leaders would protect the state “against any threat, no matter who makes it. And that’s exactly what this budget delivers.”

Ferguson said the budget framework “sets Maryland on the right path at this critical moment in time.”

“With a potential storm looming from the federal government, we must chart a new path for our great state that accounts for the chaos and uncertainty that we are seeing from D.C. every day,” said Ferguson, a Baltimore Democrat.

Republican lawmakers stood amid the crowd watching the Democratic leaders during their State House news conference. They walked away unimpressed with that they heard.

Del. Jason Buckel, the House minority leader, called the lack of clarity on the budget plan “disappointing” and questioned the logic of a tax on IT services when Moore has also made growing the technology sector an economic priority.

“You don’t tell me on the left hand, this is the key to our economic prosperity, and on the right hand, tell me we’re going to tax them,” he said.

Like other Republicans in the General Assembly, Buckel was critical of the majority’s frequent references to Trump, whose slash-and-burn approach to the federal government threatens Maryland’s economy more than any other state.

Retrenchments in the federal government are inevitable under the Trump administration, Buckel said, and Maryland has not set up its economy to withstand the cuts.

“If we were better prepared and we had policies and investments that really led private sector companies to come here, we could shrug it off and move forward,” he said.

Members of Maryland’s Freedom Caucus, a small group within the minority party that closely aligns with Trump’s policies, called criticism of the presidential administration “blame shifting at its worst.”

Del. Kathy Szeliga, a Baltimore County Republican, said the taxes proposed on technology services and on wealthier Marylanders are similar to taxes attempted by former Democratic Gov. Martin O’Malley.

“We cannot recycle bad ideas,” Szeliga said.

Following the press conference, the House’s committees that handle budget and tax issues moved the revised budget bills forward, with Democrats in support and Republicans in opposition.

Barnes, the House Appropriations chair, said the choices were difficult but the resulting budget “really puts us in good fiscal shape moving forward.”

The budget bills will next be considered by the full House of Delegates, and then by the state Senate before being sent back to the governor. Moore said he looks forward to eventually signing the budget bills into law.

“We know we have more work to do before signing it, but together today, we celebrate a very important step forward in securing Maryland’s long-term fiscal health,” he said.

This is a developing story.