Friday Five
Jan. 30, 2026 | This week's latest on Maryland business and government
1 — Moore’s budget fixes current deficit, analysts pessimistic
Governor Moore’s proposed $70.8 billion fiscal 2027 budget closes a more than $1.5 billion shortfall without raising new taxes while boosting funding for areas like education and housing, but analysts warn it still leaves large structural deficits in out years that future leaders will have to address. They also say although it improves the fiscal outlook for 2027 and 2028, significant gaps are projected through 2031: $2.3 billion shortfall in 2028, $3 billion in fiscal 2029 and a projected $4.1 billion by 2031.
Deficit drivers: In addition to the costs that will be imposed on future budgets by the Blueprint for Maryland’s Future education plan, the growing deficit will be driven in coming years by rising employee salaries and benefits, teacher retirement and human services spending.
2 — Maryland looking to be competitive to avoid residents from leaving to neighboring states
Maryland officials note the state has seen tens of thousands of residents move to neighboring states like Virginia, Pennsylvania and the Carolinas, driven largely by high housing costs and taxes, and lawmakers are discussing ways to make the state more competitive to retain and attract people. They highlight the need to invest in small businesses and industries, ease regulatory burdens and strengthen local economic opportunities to slow outmigration and bolster the state’s labor market and tax base. The 2025 report from the Comptroller suggests older wealthier residents were originally leaving, but now more lower and middle-income residents are leaving as well due to high costs.
Taxpayers gone like the wind: Over the period of 2010 and 2023, 2.3 million people moved to neighboring states.
3 — House committee presses ahead with mid-cycle Congressional redistricting bill
A House committee advanced House Bill 488 along party lines after hours of testimony, setting up a fast-track vote in the full House on a Democratic-backed mid-cycle congressional redistricting plan that would significantly reshape all eight districts and target Maryland’s lone Republican seat. Supporters, including Governor Moore, argue the move is a necessary response to partisan redistricting in other states, while Republicans and some Democrats warn it is overly partisan, legally risky and undermines long-standing redistricting principles. Although the bill is expected to pass the House, it faces an uncertain future in the Senate, where leadership has expressed opposition to mid-decade redistricting.
In Virginia: A judge ruled this week that a proposed constitutional amendment letting Democrats redraw Virginia's Congressional maps mid-cycle was illegal.
4 — Moore aims to boost energy capacity, aid utility customers
Governor Moore has introduced the Lower Bills and Local Power Act to modernize Maryland’s electric grid, provide direct utility bill rebates and invest in local energy projects as the state faces ongoing generation challenges. The proposal would direct $200 million from the Strategic Energy Investment Fund toward ratepayer relief, transmission planning and clean energy financing, while also requiring utilities to remove certain profit incentives. Legislative leaders said they will closely evaluate whether the proposal delivers the greatest value for ratepayers and meaningfully advances Maryland’s energy generation needs.
Also: Moore’s legislation would mandate that utility companies prioritize advanced transmission and grid-enhancing technologies when looking to increase capacity.
5 — Maryland consumer prices track above national average, U.S. inflation holds at 2.7%
In December, U.S. consumer prices rose 2.7 percent year over year, with monthly increases led by shelter and food, while core inflation eased slightly to 2.6 percent. In Maryland, prices grew faster than the national average, driven by housing, food and energy costs, reflecting the state’s higher baseline cost of living. Federal policymakers continue to monitor inflation data for interest-rate decisions, though regional differences in Maryland highlight the impact of local housing and energy expenses on households.
On competitiveness: Our state's high costs of living and doing business continue to put Maryland at a competitive disadvantage. A more balanced, business-friendly regulatory environment is needed to help control costs and support growth.
Advancing inclusive partnerships for a Maryland where all businesses and their communities thrive
The Maryland Chamber of Commerce is the state’s leading business advocacy organization — committed to working with our alliance of partners on critical public policy issues. With a focus on economic development and grassroots advocacy, we impact policies that directly affect Maryland business.
