ANNAPOLIS, Md. — Governor Wes Moore gave his proposal to deal with the state's fiscal issues to a packed reception room Wednesday.
One of Moore's four key pillars is revising the state's tax plan.
"This tax system makes no sense in the state of Maryland," said Moore.
Under the new plan, the majority of Marylanders, 82% of them, will see cuts or no change. The top 18% will see tax increases.
The administration says this will mainly be felt by Marylanders making $700,000 a year or more.
Though the administration could not give an exact answer to what your income level needs to be to expect increases.
"We're going to be asked to contribute a little bit more," said Moore. "So we can make targeted investments in economic growth and targeted investments in public safety and targeted investments in education."
It also eliminates the itemized deduction and doubles the standard deduction.
Adding two new tax brackets for those making $500,000 and another at one million dollars.
Republicans say this won't work, saying it will drive wealthy people out of the state.
"We have seen this happen before, during the O'Malley years we did this. There is data that shows this didn't work there was a 30% reduction in that tax bracket," said Senator Paul Corderman, a Republican representing Washington and Frederick counties.
Moore is also proposing $2 billion in cuts.
Several areas will see slowed implementation like the Blueprint for Maryland's future or Developmental Disabilities Administration
The state will also cut some higher education funding and ask hospitals and insurance companies to pay more to cover Medicaid expenses.
"We are proposing to offset some of our increase in Medicaid expenses to insurers and hospitals as some states do," said Secretary of Budget and Management Helene Grady.
Moore's budget is just a proposal.
Now the House and Senate will determine what happens to it.
"There are parts that I know are going to cause concern to some of our members, we're going to work through those," said Senator Guy Guzzone, Chairman of the Budget and Tax Committee. "We're going to be evaluating the budget page by page, line by line department by department," he added.
The biggest long-term issue Moore is trying to tackle is the lagging Maryland economy.
"From 2017 to 2022 the national economy grew by 11%, Maryland's economy grew by just 3%," said Moore who added growing the economy is his top priority.
To do that this budget invests $750 million in economic growth.
As for Maryland's surplus, Moore says it never existed in the structural budget.
Saying it was one-time COVID money propping up Maryland's budget.
"Federal dollars that came into the state, billions of dollars that came into the state did not represent a structural surplus in any way shape or form. It basically was just one-time money. One-time funding. But that's not structural," said the Governor.
There are also added fees in Moore's plan.
Fees for getting your car inspected double under it from $14 to $30.
The cannabis tax goes from 9 to 15 percent.
Taxes on sports gambling also go up by double.
Over the next 83 days, Maryland's legislature gets to decide what stays or goes from the budget.
