Maryland closed out fiscal year 2026 with $1.052 billion in its General Fund, according to the annual Closeout Report released Sept. 4 by the Office of the Comptroller — a result driven by revenue that outpaced projections despite continued losses in the state’s federal workforce.
Of that total, $551 million was already assigned by the General Assembly toward fiscal 2027 operations, leaving $501 million unassigned and available for future budget needs. “Closing the fiscal year with a positive balance is good news,” Comptroller Brooke E. Lierman said, adding that the unassigned balance puts Maryland “in a stronger fiscal position to navigate the budget challenges ahead.”
General Fund revenues totaled $28.06 billion for the year, a 9.1% increase over fiscal 2025. Excluding $405 million in one-time revenue, ongoing collections still grew 7.5%. Before accounting for required transfers, revenues came in $563.5 million, or 2%, above the state’s official estimate. Personal income tax collections led the way, bringing in $15.87 billion — $255 million above projections and 9% growth over the prior year — fueled largely by a 20% jump in nonwage income such as capital gains, dividends, and business earnings, alongside new state tax legislation that raised the top income tax rate to 6.5% and added a surcharge on capital gains for high earners. Sales tax revenue reached $6.48 billion, edging past estimates by just under 1%. Corporate income tax was the lone weak spot among major sources, falling 5.3% to $1.78 billion, even though the total still landed $135 million above the state’s (lowered) forecast — a swing tied to new federal tax law and a late-year rebound in corporate payments that reversed a much steeper decline earlier in the year.
Under a state policy meant to guard against volatile, hard-to-predict revenue swings, the Comptroller’s Office was required to sweep $392.2 million of the revenue over-attainment into the state’s Rainy Day Fund and Fiscal Responsibility Fund rather than count it toward the year-end balance. After that transfer, the state still finished $171.3 million above its official revenue estimate. The Rainy Day Fund itself ended the year with just under $2.34 billion on hand.
The surplus came against a difficult economic backdrop. Since January 2025, Maryland has lost 28,500 federal jobs — an 18.5% reduction in the state’s highest-paying industry — with private-sector employment initially contracting alongside it. The report notes that federal job losses leveled off by January 2026 and the private sector began recovering in November 2025, though reduced federal spending continues to weigh on contractors, universities, and nonprofits that rely on federal funding. State officials say resilient consumer spending and strong nonwage income growth helped offset those headwinds, though real (inflation-adjusted) economic growth has slowed to just 0.8% year-over-year as of the most recent quarter, even as nominal growth remains stronger.
