Maryland residents face one of the highest state and local tax burdens in the nation as Governor Wes Moore signed the fiscal year 2027 budget this week in Annapolis.
Maryland ranks seventh nationally with a total tax burden of 9.70 percent of personal income, according to WalletHub’s 2026 analysis released March 31. Income taxes drive much of that figure at 4.28 percent of personal income, ranking third in the country. Property taxes stand at 2.54 percent, ranking 29th, and sales and excise taxes at 2.88 percent, ranking 40th.
A household earning $100,000 pays roughly $9,700 in combined state and local taxes under that share. The ranking arrives after 2025 policy changes that added higher income tax brackets, a surcharge on certain capital gains, and an expanded sales tax on some services. Those measures addressed earlier shortfalls but left longer-term pressures intact.
The 2025 Spending Affordability Committee report projected a structural deficit of about $1.2 billion for fiscal 2027, growing in future years largely because of education spending under the Blueprint for Maryland’s Future plan. Earlier gaps reached the $3 billion range and were closed through spending cuts and revenue increases.
Governor Moore signed the roughly $70.8 billion fiscal year 2027 budget on April 8. The plan includes no new taxes or fees, maintains the Rainy Day Fund at 8 percent of revenues, and reports slightly lower general fund spending than the prior year while delivering a $250 million surplus. It passed with bipartisan support from the Maryland General Assembly.
Key allocations include $10.1 billion for K-12 education, an increase of more than $370 million from fiscal 2026. That total reflects a nearly 17 percent rise in overall K-12 funding since the Moore-Miller administration began. The budget directs $10.9 million to evidence-based literacy and math coaches through the Academic Excellence Program and $480.5 million in state funding for school construction.
Public safety receives $124.1 million for law enforcement. Child care support totals more than $434 million in related investments, while energy programs get roughly $306 million, including efforts to lower electric bills. Human services funding covers low-income rental assistance and other family programs.
These priorities reflect ongoing commitments to education, public safety, and affordability, even as structural challenges persist. The Spending Affordability Committee warned that Blueprint-related costs will require growing general fund support starting in fiscal 2028, potentially widening gaps without additional adjustments.
For Southern Maryland communities in Calvert, Charles, and St. Mary’s counties, the budget sustains local aid formulas that support school infrastructure and public safety services. Residents in the region contribute to the state’s tax base through income, property, and sales taxes while benefiting from statewide education and safety investments. The high overall burden underscores affordability concerns for working families and small businesses across the area where housing costs and commuting expenses already strain budgets.
State officials emphasize the budget balances immediate needs without new revenue measures. Critics, including some Republican lawmakers, note that long-term sustainability of education funding remains unaddressed, raising questions about future tax pressures or spending restraint.
The WalletHub study measures effective tax burdens as a percentage of income, providing a standardized comparison across states. Maryland’s position places it behind only a handful of states with higher combined loads, while its income tax component stands out nationally.
This fiscal picture arrives as Maryland continues managing post-pandemic recovery inflation effects and federal policy shifts. The signed budget aims to stabilize core services while preserving reserves for potential downturns. Southern Maryland residents will see the impacts through continued school funding, local law enforcement grants, and energy assistance programs designed to ease household costs.
