CBS NEWS: Maryland Chamber of Commerce claims Gov. Moore’s budget proposal could hurt businesses

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Maryland small business owners say Gov. Wes Moore’s proposed budget plan could end up running them out of business.

The Maryland Chamber of Commerce and representatives of small businesses are opposing the governor’s proposal, saying his proposed tax legislation could devastate small businesses.

Moore’s FY2026 proposed budget aims to cut into the state’s $2.7 billion deficit.

“The message we’re sending to entrepreneurs and businesses with this type of legislation is clear, your investment and job creation isn’t valued here, and I think that’s a very dangerous message to send,” said Greg Brown, owner of Brewers Alley in Frederick.

Mary Kane, with the Maryland Chamber of Commerce, took to the podium on Thursday and called on state lawmakers to reject the proposed pass-through tax increases for small businesses, abandon combined reporting, preserve enterprise tax zone credits, and revise the corporate tax rate proposal.

“Our state is debating tax proposals that threaten to push Maryland in the wrong direction, an approach that is short-sighted and will only make things worse,” Kane said. “Instead of looking at businesses as a problem, or another target for taxation, we should recognize them as part of the solution, key drivers of growth and opportunity.”The state is legally required to pass a balanced budget, and the legislature will likely vote on the 83rd day of the session, on April 1, 2025.

“I’m very pro-business”

On Thursday, in a meeting before the General Assembly, Gov. Moore made his case for his budget-balancing plan, targeting changes to the tax code that will raise money for the billion-dollar budget deficit, but also give tax relief to moderate-income families.

Moore also said he wants businesses to come to Maryland and stay.

“I am very pro-business,” Moore said. “I want businesses to be able to come here and stay here.”

Moore’s proposal includes reducing a corporate tax cut by .26%, which delegates pointed out is still higher than neighboring states.

“The consequences of our tax and business environment are already evident,” Kane said. “We are falling behind in every measure of economic competitiveness.”

Gov. Moore’s tax plan

Under his proposed tax plan, the state’s lowest four tax brackets would be combined and taxed at a 4.7% rate, meaning that two-thirds of state wage earners would see a tax cut, which averages to nearly $175.

The standard deduction would double, while itemized deduction would be eliminated.

Two new tax brackets for the highest-income Marylanders would be created. Those who make $500,000 per year will be taxed at 6.25% while those making $1 million or more will be taxed at 6.5%. Currently, Marylanders who make over $250,000 are taxed at 5.75%.

The inheritance tax would be eliminated. The corporate tax rate would also be cut, which Gov. Moore hopes incentivizes businesses to grow in the state.

Bolstering Maryland’s economy

When it comes to bringing in business and bolstering Maryland’s economy, the governor said the state is already seeing progress.

“For the first time in a long time, we’re watching labor force participation increase in the state of Maryland, not decrease. When I was inaugurated, Maryland was 43rd in the country in unemployment. Now, Maryland has amongst the lowest unemployment rates in the entire country,” Gov. Moore said.

He added that the goal will be to incentivize businesses to come to the state, making it easier for them to grow.

“We will continue going out, meeting with CEOs, meeting with business leaders, particularly in growth industries, and letting them know that there is no better backdrop for their long-term growth than the state of Maryland,” the governor said.