As Maryland state lawmakers work to complete a $67 billion budget for the state government, they insist that “everything’s on the table” — including tax increases and spending cuts — to keep the books in balance.

Lawmakers are weighing how to keep funding intact for vital government programs while inflicting the least financial pain on Marylanders. That work is becoming more difficult as the state starts to see economic fallout from the Trump administration’s slashing of federal government jobs.

“All options are on the table right now to make sure we protect public education, health care and vital services for Marylanders,” Del. Ben Barnes, the House of Delegates Appropriations Committee chairman, told reporters recently.

So what exactly — and who — is on the table to raise more money for the state? Here’s a look at the options, including proposals introduced this year and others that have been floated in the past.

Gov. Wes Moore’s tax package

How it would work: Moore has proposed several tax changes in his budget bills, including:

• Tax individual earnings beyond $500,000 at 6.25% (up from 5.75%) and beyond $1 million at 6.5% (up from 5.75%). Also consolidate the tax brackets for the state’s lowest earners.
• Add a 1% surcharge on income from capital gains from people with total income greater than $350,000.
• Require corporations to follow a practice called combined reporting when calculating taxes, while also cutting the corporate tax rate from 8.25% to 7.99% – starting in 2028.
• Create a 75-cent fee on home deliveries of goods and food from large companies.
• Increase the state’s take from casino table games (to 25%, up from 20%) and mobile sports gambling (to 30% from 15%).
• Increase the tax on cannabis to 15% from the current 9% – starting on July 1, 2026.
• Eliminate the ability for taxpayers to itemize deductions on their state tax return, while also doubling the amount of the standard deduction.
• Rework how taxes are calculated on trade-in vehicles.
• Authorize state agencies to increase or add a variety of fees.

How much it would raise: All told, the governor’s plan would raise more than $1 billion per year, though some of the money wouldn’t kick in right away. Most of the money would come from the changes to income tax rates and deductions, estimated to be $700 million next year if all the income tax changes are made.

How likely it is: It’s almost certain that at least some of Moore’s proposals will survive the scrutiny of lawmakers, but they’re looking to reject some of the less-popular changes.

Lawmakers are concerned in particular about eliminating the ability of taxpayers to itemize deductions, such as mortgage interest and charitable donations, from their state tax returns and replacing it with a more generous standard deduction. One in five Maryland taxpayers itemizes deductions, and that portion of Moore’s plan would raise $368 million per year.

Business-to-business tax

How it would work: The state would require a 2.5% tax to be paid when businesses sell services to one another. For example: A law firm hiring a marketing company would pay 2.5% on the marketing services.

How much it would raise: $1 billion per year.

How likely it is: This proposal has good odds of passing. It was introduced late in the session, but it’s sponsored by two top Democrats: House Majority Leader Del. David Moon and Sen. Shelly Hettleman. Democratic leaders haven’t explicitly endorsed the tax, but they’ve said the tax code needs to be changed to reflect an economy that’s increasingly based on services — which aren’t taxed — and less on selling goods that are subject to the sales tax.

Legalize online gambling

How it would work: Voters would get a say on whether the state would issue licenses to businesses to allow Marylanders to legally play games like poker and blackjack online or on their phones. Currently Maryland only offers online betting for sports.

How much it would raise: Once fully implemented, the state would raise more than $200 million per year, by taking a 20% cut from live dealer games and a 45% cut from other types of gambling. The bill proposes directing most of the money to the Blueprint for Maryland’s Future, a public school improvement program.

How likely it is: Unclear. The House of Delegates put forward online gambling — also called “iGaming” — as a way to raise money during last year’s budget negotiations, but it did not make the final cut.

The ‘Fair Share Maryland’ plan

How it would work: This plan, backed by a coalition of progressive groups and unions, would raise taxes on Maryland’s highest earners, institute multiple types of complicated corporate tax reform, while also boosting lower-income families through changes in the Earned Income Tax Credit and the Child Tax Credit.

How much would it raise: $1.6 billion per year.

How likely it is: The coalition had struggled in past years to get momentum for the Fair Share Maryland plan, but this year the governor’s budget proposal incorporates some elements of the plan. The coalition is pushing for more, but it remains to be seen if they’ll be successful.

Sugary drinks tax

How it would work: Beverage distributors would pay a tax of 2 cents per ounce of “sugary beverages” sold — including those with sugar substitutes, such as sucralose, as well as on syrups or powders used to make such drinks. Drinks excluded from the tax include natural fruit and vegetable juices, milk, infant formula, medical beverages and water.

How much it would raise: $500 million per year, with the money split among school meals, child care subsidies and the state’s general fund.

How likely it is: The bill, dubbed the “For Our Kids Act,” had a hearing in the House of Delegates last week, but its prospects are unclear.

Other sales tax changes

How it would work: In past years, changes to the state’s 6% sales tax have been floated as a way to raise money. One recent proposal that hasn’t been brought back this year would be to drop the sales tax rate from 6% to 5%, but at the same time apply it to services, from getting a haircut to hiring a landscaper.

How much would it raise: When this idea was brought up last year, the estimate was that it would initially raise more than $2 billion a year, increasing to $3 billion over time.

How likely it is: To be clear, this proposal isn’t officially on the table this session, and it has already failed twice, in 2024 and in 2020.

Vehicle tax increase

How it would work: Increase the state vehicle excise tax rate to 6.75%, from the current 6%.

How much it would raise: More than $200 million per year for transportation programs.

How likely it is: This bill had a hearing early in the session and has not advanced; a similar proposal failed in 2024.

Firearm tax

How it would work: Impose an additional 11% tax on sales of guns by federally licensed firearms dealers.

How much it would raise: $15 million per year, with the money going to support the state’s medical trauma system and various violence prevention and victim services program. (Another version of this measure, increasing the sales tax on guns from 6% to 12%, would raise about $12 million.)

How likely it is: A proposed gun tax got a lot of attention last year, but didn’t make it all the way through. This year’s version has not advanced.

Sales tax on vehicle services

How it would work: This proposal would charge the 6% sales tax on transportation-related services, such as auto repair, limousine rides, towing and air transportation.

How much it would raise: More than $500 million per year for transportation programs.

How likely it is: Prospects do not look good for this bill, which had a bill hearing early in the session but has not advanced.

Other options

Nonpartisan analysts with the Department of Legislative Services have offered lawmakers several options for raising money, among them:

• Increase the state property tax — currently 11.2 cents per $100 of property value — by 1 cent, generating $95 million.
• Increase the transfer tax on sales of high-value properties (minimum of $1 million for residential, $10 million for commercial) to 1%, up from 0.5%, generating $40 million.
• Charge the 6% sales tax on salty snacks, which are currently exempt from tax, generating $29 million. This would reinstate a short-lived policy from the 1990s.
• Eliminate the tax-free back-to-school shopping week, generating $7 million.

“We’re trying to give you as many options as you can have to try to figure out how to resolve the budget challenge,” David Romans, coordinator of fiscal and policy analysis at DLS, told lawmakers last month.