Maryland’s revenue forecast for December remains relatively steady, but the state’s key financial panel says federal uncertainty and tax code changes still leave a lot up to chance in the coming months.
The Board of Revenue Estimates now predicts Maryland will bring in just under $26.8 billion for the current fiscal year, which is at its halfway point.
This projection is $90.7 million over the body’s September estimate and reflects 4.1 percent revenue growth compared to last fiscal year.
Fiscal year 27’s revenue projection also went up slightly, but revenue growth is expected to slow, increasing by only 1.4 percent over the current fiscal year.
“Our revenues continue to be in line with our expectations, despite the headwinds we face from Washington DC, these federal cutbacks and then also this general uncertainty about the economy,” Director of the Bureau of Revenue Estimates Robert Rehrmann said.
Comptroller Brooke Lierman says while seeing this type of consistency is a good sign, she points out fiscal predictions were intentionally lowered prior to the start of the fiscal year to account for federal tax changes, tariffs and mass employee layoffs.
“We were very proactive in reducing our revenue forecast because of the uncertainty that we faced because of the incoming administration, and those adjustments, it turns out, were quite appropriate,” she said.
The small net revenue gains are largely due to an uptick in the state’s capital gains forecast, but Lierman worries the increases do not reflect the true state of Maryland’s economy.
She notes Maryland has one of the highest median household incomes in the nation at around $102,000, but the state’s economy is buoyed by its high earners while financial challenges for low earners only worsen.
This divergence of income groups is known as a K-shaped economy.
“The cost of living has surged, and wages have not kept pace, and because Maryland has a large number of high income households, families who own homes, hold investment portfolios, pay taxes on capital gains– their economic activity can mask the struggles of those on the downward leg of the K, but we certainly know those struggles are real and we have to confront them.”
Rehrmann also explained the December estimates lacked the data it expected to have due to the federal government shutdown.
The shutdown not only delayed state-level employment data, but it occurred in the same month as the expected initial impact of the Deferred Resignation Program.
“These are federal employees who are basically on administrative leave but are generally getting paid through the end of September, and we were hoping in our October withholding collections, we’d get an initial readout of what, if any, impact that would have, as they are no longer paid by the federal government,” Rehrmann explained. “But because the shutdown occurred in the same month, we don't have a read on that. It's going to be a couple months before we can probably look at that data and figure that out.”
As of August 2025, Maryland is down 14,500 total federal jobs since December 2024, a decline of 8.9 percent – the largest drop of any state.
Maryland also decoupled from the three largest tax changes under President Trump’s “One, Big Beautiful Bill Act” to protect revenues – particularly around corporate income tax – but the revenue category remains Maryland’s weakest.
“So really the corporate income tax, it illustrates the uncertainty that we're facing in a lot of our revenue sources. But as always, we're going to continue to monitor our economic data, our tax data, and make appropriate adjustments as necessary in March,” Rehrmann said.
Maryland is anticipating a $1.5 billion budget shortfall next fiscal year, which Gov. Wes Moore and state lawmakers will work to close in the coming months.
