Maryland’s current budget

Governor Wes Moore released his FY 2026 budget proposal in January 2025 and gave the state of state address in February 2025. The FY 2026 budget was enacted in May 2025.

Maryland enacted its FY 2025 budget in May 2024. The budget included $25.9 billion in general fund spending and $63.1 billion in total spending, a 5 percent and 2 percent decrease from the previously enacted budget, respectively. In 2025, Maryland passed a capital gains surcharge tax on those with high incomes.

Under the American Rescue Plan, Maryland received $3.7 billion in direct state fiscal aid and $1.8 billion in local government aid from the federal government. As of January 2025, Maryland had fully allocated its state ARP. States must spend the funds by Dec. 31, 2026.

According to the National Association of State Budget Officers (NASBO), Maryland’s total expenditures in fiscal year FY 2025 were $67.7 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2025 were $2.9 trillion, ranging from $5.4 billion in Wyoming to $413.8 billion in California.

According to NASBO, Maryland’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

• FY 2025: $27.5 billion/$70.9 billion
• FY 2024: $27.4 billion/$67.7 billion
• FY 2023: $28.0 billion/$69.1 billion
• FY 2022: $21.0 billion/$70.0 billion
• FY 2021: $18.8 billion/$55.1 billion
• FY 2020: $19.0 billion/$48.6 billion
• FY 2019: $17.8 billion/$45.1 billion

For more on Maryland’s budget, see

• the Maryland Department of Budget and Management,
  
• the Comptroller of Maryland, and
  
• the General Assembly of Maryland, Department of Legislative Services.

Maryland’s budget institutions, rules, and constraints

Maryland uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. While the General Assembly recommends a spending limit to the governor, there are no enforced tax and expenditure limits. There are, however, limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Overview of Maryland’s state and local expenditure and revenue sources

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Maryland’s combined state and local direct general expenditures were $80.1 billion in FY 2022 (the most recent year census data were available), or $12,998 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $12,083.

Maryland’s largest spending areas per capita were public welfare ($3,199) and elementary and secondary education ($2,830). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Maryland’s combined state and local general revenues were $88.1 billion in FY 2022, or $14,285 per capita. National per capita general revenues were $13,619. Maryland uses all major state and local taxes. After federal transfers, Maryland’s largest sources of per capita revenue were individual income taxes ($3,189) and property taxes ($1,873).

Maryland’s economic trends

Maryland’s per capita income (per the Bureau of Economic Analysis) was $78,538 in 2024, ranking 10th among the states. It was above both the national average of $72,425 and the Mideast regional average of $76,018. The state’s median household income (five-year estimate) was $103,678 in 2024, ranking second among the states and above the national average of $80,734. Maryland’s poverty rate was 9.4 percent in 2024 (five-year estimate), below the national rate of 12.5 percent.

Although Maryland’s averages tell a story about the entire state, Maryland is composed of diverse localities. For example, the city of Hagerstown’s median household income was $52,221, and its poverty rate was 21.9 percent; the city of Potomac’s median household income was $236,675, and its poverty rate was 3.9 percent.

Maryland’s unemployment rate has historically been below the national average.

Unemployment rates (like other economic indicators) often vary significantly by race and ethnicity. In Maryland, the average unemployment rate in 2024 was 3.3 percent for white residents, 5.1 percent for Black residents, and 5.1 percent for Hispanic or Latino residents.

The major industries that contributed the most to Maryland’s gross domestic product (GDP) in 2024 were government, finance, professional services, social services (i.e. health and education), and construction. Government and construction contributed more to Maryland’s GDP than they did to the nation’s and region’s GDP, while finance was less important to Maryland than it was to the nation and region in 2024.

Looking at more specific industries, among those that accounted for at least 1 percent of Maryland’s GDP in 2023, the federal government produced far more for the state than for the nation, contributing 10.6 percent to Maryland’s GDP and 2.2 percent to the nation’s. Other industries that overperformed in Maryland relative to national averages in 2023 were construction; real estate; miscellaneous professional, scientific, and technical services; and computer systems design.

Maryland’s politics

Governor Wes Moore, a Democrat, was elected in 2022 with 65 percent of the vote. The next gubernatorial election is in 2026.

Democrats control both the House of Delegates (101 Democrats to 39 Republicans) and Senate (34 Democrats to 13 Republicans), with veto-proof majorities in both houses. Control of the governor’s mansion and each house of the legislature gives Democrats a trifecta in Maryland. The entire legislature is up for election in 2026 because both delegates and senators serve four-year terms.

Maryland’s demographics

As of July 2024, Maryland’s population was 6,263,220. That was up 8.2 percent from 2010. The state’s population growth rate was slower than than the nation’s 9.9 percent growth over the same period. The Urban Institute estimates the state’s population will increase 17.6 percent between 2010 and 2030, more than the nation’s estimated growth rate of 16 percent.

Additional resources

• The State and Local Finance Initiative’s Backgrounders explain the tax and spending issues highlighted in these briefs.
  
• The State Economic Monitor presents updated data and customized visualizations of state economic indicators.
  
• State and Local Finance Data: Exploring the Census of Governments allow users to sort, customize, and download the Census of Governments State and Local Finance series data featured in these summaries.
  
• The State Tax and Economic Review series provides quarterly reports on state tax collections and underlying economic trends in all 50 states.
  
• The Urban Institute’s State Tax Data Subscriptions provide access to up-to-date revenue data in all 50 states.