Annapolis Update #2

Fiscal Year 2026

Governor's Proposed Budget Highlights Overview:

Governor Moore’s proposed FY26 budget totals $67.3 billion, reflecting a 1% increase in spending compared to the previous fiscal year and must close a $3 billion budget deficit.

• $987 million in new or increased taxes, fees, and assessments.
• Increases to the standard deduction and applies it to all households regardless of income level AND creates two new income tax brackets for "high income" earners.
• Reduces Corporate Income Tax rates from 8.25% to 7.99% BUT implements combined reporting.
• Increases Cannabis Tax from 9% to 15%.
• Increases Casino Table Game Tax from 20% to 25%.
• Establishes a four-year surcharge on capital gains income over $350,000.
• Eliminates the inheritance tax BUT lowers the estate tax exemption from $5 million to $2 million.
• Increases emissions fee from $10 to $30 and the emissions late fee from $15 to $30.
• Establishes an Administrative Fee if you pay your vehicle registration costs through installments.
• Expedites the implementation of last year’s increases in vehicle registration fees. 
• $180 million for climate reduction initiatives, doubling the previous year’s funding of $90 million. (All funding is dedicated to wind and solar projects.)
• $122 million for local police departments.
• $2.5 billion in adjustments to the Blueprint for Maryland’s Future over the next five years.
• $400 million for childcare scholarship programs.
• $9.7 billion for K-12 education.
• Preserves the Rainy Day Fund at 8% of the state budget.
• Reduces funding for the Developmental Disabilities Administration by $200 million.

My Initial Thoughts

Upon reviewing Governor Wes Moore's 2026 Budget Bill, it is evident that spending has increased compared to last year’s budget. The proposal includes $987 million in new taxes and a $200 million reduction in funding for the Developmental Disabilities Administration. Additionally, it raises taxes on high-income earners, a measure that historically led to the loss of $1 billion from the state’s net tax base in 2008 as residents relocated to other states.

Another significant concern is the potential impact on family farms and small business owners planning to pass down their estates. The proposed reduction of the estate tax exemption threshold from $5 million to $2 million would impose a heavy tax burden on the next generation, penalizing Marylanders who have worked hard to build a secure and successful future for their families.

To review Maryland Administration's budget proposal on your own, please see Budget Highlights for Fiscal Year 2026.

IN THE DISTRICT:

Legislative District 7 Baltimore & Harford Counties

BALTIMORE COUNTY:

Notice of Marine Operations at Rocket Lab

The Rocket Lab facility in Middle River, Maryland, is poised to be a hub of innovation and activity. This historic location has a deep-rooted legacy in aerospace manufacturing, dating back to 1929, when it first became the home of Glenn L. Martin’s operations. Over the decades, the site has been integral to the aerospace industry, later housing Martin Marietta and eventually Lockheed Martin.

Rocket Lab has established its Space Structures Complex within the 113,000-square-foot former Lockheed Martin Vertical Launch Building. This facility, steeped in nearly a century of aerospace heritage, continues to serve as a center for groundbreaking advancements in space technology. The buzz of activity at Rocket Lab reflects its mission to build on this legacy while driving forward the next generation of space exploration and manufacturing.

Learn More About Maryland's 100+ year History with Aircrafts

Image courtesy of www.RocketLabs.com from Ribbon Cutting in November, 2023

HARFORD COUNTY:

Senator J.B. Jennings' 2025

7th Legislative District Senatorial Scholarship

This week, I announced my 2025 7th Legislative District Senatorial Scholarship. This is open to students who are preparing to attend, or already attending an undergraduate, graduate or professional program. To check to see if you live in my district, please check search Maryland General Assembly's Website.

To apply, please visit: My Scholarship Portal

As always, thank you for taking the time to read today's Annapolis Update and please stay tuned for future updates, especially as this Legislative Session becomes increasing more involved.

Sincerely,