The Taxman Outsources the Bill – But You Will Still Pay It by Clayton Mitchell

The moral imagination of Maryland’s governing class has suffered an embarrassing decline, leaving us with a legislature that has confused deception for discipline, cost shifting for cost cutting, and fiscal smoke and mirrors for sound governance. Nowhere is this more apparent than in the Budget Reconciliation and Financing Act (BRFA) of 2025, a piece of fiscal trickery that Governor Wes Moore and his allies in the legislature would like you to believe represents responsible budget trimming.

Thanks to the reporting by David M. Higgins, II, in the Southern Maryland Chronicle, we have a clearer picture of what is really transpiring in Annapolis. The state, staring down a staggering $3.3 billion shortfall, has opted for the path of least resistance: shifting financial burdens onto county governments while simultaneously engineering a tax grab that would make even the most committed Keynesian blush.

Maryland’s counties are being handed the privilege of plugging the state’s budget holes, courtesy of new unfunded mandates. The partial shift of teacher pension costs—initially proposed at $195.5 million but mercifully whittled down to $97.7 million—remains a significant encumbrance on counties that have no say in pension policy. Meanwhile, counties are now forced to pay 90% of the State Department of Assessments and Taxation’s (SDAT) $21.2 million annual cost, a program they do not control but upon which their property tax revenues depend. If there were a contest for the most cynical example of cost shifting, this might win it.

But wait… there’s more! Governor Moore and his legislative enablers have decided that counties should also foot half the bill for wrongful incarceration compensation settlements. This bill is measured in billions of dollars. 

It seems we have reached a point where the state can create obligations and then outsource the financial responsibility—an arrangement that would make any private-sector accountant recoil in horror.

As Higgins has reported, the Maryland Association of Counties (MACo) has rightly raised alarms over these fiscal acrobatics. Counties already contribute $1.4 billion more to public school funding than required under the Blueprint for Maryland’s Future, a shortfall exacerbated by state underfunding of special education and student transportation. That the state continues to lean on counties to shoulder even greater burdens is an admission of its own budgetary incompetence.

For those in Annapolis, the word “cut” seems to have lost all meaning. This is not budgetary restraint—it is a calculated effort to offload expenses onto local governments while maintaining the illusion that state spending has been prudently managed. Governor Moore is not reducing the size of government; he is merely hiding its growth by pushing the bill elsewhere.

Of course, no discussion of the BRFA would be complete without acknowledging the latest assault on Maryland taxpayers. With surgical precision, the state has carved out new revenue streams, each more insidious than the last. The 6.25% income tax rate for earnings between $500,001 and $1 million, coupled with a 6.5% rate above $1 million, is expected to drain $344 million from the private sector. The 2% capital gains surcharge? Another $367 million extracted from investors and entrepreneurs. Then, there’s the 3% sales tax on data and IT services, set to pull in a staggering $497 million—because nothing says “business-friendly” like new taxes on innovation and technology.

But wait—there’s even more! Increased vehicle excise taxes, doubled titling fees, surging registration fees, and an escalating cannabis sales tax round out this exhaustive menu of revenue grabs. It is a tax-and-spend bonanza that would make even the most avowed redistributionist beam with pride.

The Annapolis progressive elites have attempted to sell this package as a balanced, thoughtful approach to governance. They tout their supposed budget cuts as evidence of prudence. Yet, as Higgins’ reporting makes clear, these are not cuts. These are liabilities dressed up as savings, costs shifted downward so that Annapolis can pretend to be fiscally responsible while counties are left to either raise property taxes or slash essential services.

In the end, this is a story as old as government itself: the state expands, the burden increases, and the citizens—whether directly or through their local governments—are left holding the bag. Governor Moore and his allies will no doubt continue their rhetorical tap dance, assuring Marylanders that they are the responsible stewards of taxpayer money. But make no mistake: what they have produced is not fiscal discipline. It is an exercise in obfuscation, a cleverly packaged con that attempts to disguise tax hikes and spending shifts as responsible governance.

One can only hope that Marylanders—particularly those at the county level—recognize the deception for what it is. The legislature may be able to shuffle costs around, but it cannot change the fundamental reality: state government has failed in its duty to live within its means, and it is the taxpayers who will ultimately pay the price.

But hey, at least Annapolis gets to pretend it’s fiscally responsible for another year.