The state of Maryland which is already reeling from job losses and credit downgrades is dealt another public finance challenge as the comptroller reveals a projected $189 million revenue drop thanks to implications of the One Big Beautiful Bill Act.
"Recent tax code changes, as well as federal retrenchment and grant cancellations have created complexity and uncertainty for taxpayers," said Comptroller Brooke E. Lierman.
"While we cannot eliminate this complexity, we remain committed to helping Maryland navigate these challenges."
Her 60-day
The report, which is delivered to the governor, president of the state senate, and speaker of the house lays out a series of financial challenges including havoc-wreaking moves by the Trump administration.
"Due to policy changes at the federal level, thousands of Marylanders have lost their jobs, and federal grants, contracts, and other payments flowing into Maryland are shrinking or are uncertain."
The report couches the findings as preliminary, citing OBBBA's lack of detail and clarity on several complex provisions, but the biggest revenue hit is coming from extending the personal income tax deductions created by the Tax Cuts and Jobs Act of 2017.
States retain the right to not
"Non-conformity also allows states to preserve deductions, exemptions, or credits that benefit their residents and to prevent unintended tax increases resulting from federal tax measures," said Lucy Dadayan, principal research associate at the Tax Policy Center, Urban Institute & Brookings Institution.
The comptroller has already identified three OBBBA provisions that will result in an automatic decouple which includes, full expensing of research and experimentation expenses, a new depreciation bonus for qualified production property, and modification of the business interest deduction limitation.
The comptroller also notes the new rules that raises the cap on deductions of state and local taxes to $40,000 from $10,000 and dubs the state's pass-through entity exemption as "unaffected."
The latest piece of bad news is part of a troubling pattern.
In July the city of Baltimore's financial outlook was downgraded to negative from stable by Moody's Ratings, and the state was denied Federal Emergency Management Agency funding for disaster relief.
Unemployment figures for June showed the largest single-month drop in federal jobs in almost 30 years. The same month, the Trump administration announced that the FBI headquarters were staying in Washington, as opposed to building a new one in Greenbelt Md.
In
