As the clock struck midnight and confetti fell in Annapolis, the Maryland General Assembly closed a challenging 90-day session having passed 878 bills—all now awaiting Gov. Wes Moore’s review and signature. Lawmakers moved quickly in the final days, wrapping up complex negotiations on the budget, education reforms, energy policy, immigration protections and efforts to counter the increasingly volatile federal landscape.
This session was among the most demanding in recent memory, shaped by fiscal constraints and deepening concerns about economic instability spurred by President Donald Trump’s federal actions. Below is a breakdown of the key legislative developments relevant to clients tracking Maryland’s evolving policy environment.
State Budget: Historic Deficit, Bold Moves
Confronted with a $3 billion deficit, lawmakers enacted a $67 billion budget designed to stabilize state finances amid an unpredictable federal backdrop. The final package includes:
- $1.6 billion in new taxes and fees, targeting top earners, capital gains, cannabis, gambling, car sales and technology services.
- Approximately $2 billion in spending cuts, affecting various state programs including support for local governments and public workforce expansions.
- A rebalanced Rainy Day Fund: Maryland retains $2.1 billion in reserves and ends the fiscal year with a modest surplus of $317 million.
The tax plan includes new brackets for high-income earners (up to 6.5% for those earning over $1 million), and a 3% sales tax on select IT services. Critics denounced the package as burdensome on “Main Street,” while supporters called it a necessary rebalancing of an inequitable tax system.
Energy Policy: Grid Resilience and Cost Relief
The legislature passed the Next Generation Energy Act, a sweeping package designed to address rising utility costs and long-term energy reliability. Key elements include:
- State-facilitated procurement of new energy sources, including solar, nuclear and natural gas to meet summer peak demands.
- Immediate utility bill rebates of around $80 per household this year.
- Restrictions on multiyear utility rate hikes unless they benefit ratepayers.
- Expansion of Maryland’s EmPOWER program to offer both grants and loans for energy efficiency.
Despite Gov. Moore’s push, nuclear power was not explicitly defined as a core component of the state’s clean energy strategy—a missed opportunity, in the governor’s view, to expand Maryland’s energy capacity.
Immigration: Partial Progress, Missed Protections
Immigration policy drew fierce debate as the General Assembly sought to buffer Maryland from federal overreach. Lawmakers passed a compromise bill late in the session that:
- Restricts ICE access to sensitive locations (e.g., schools, health care facilities, courthouses).
- Prohibits state agencies from selling personal data, regardless of immigration status.
- Authorizes the attorney general to establish statewide enforcement guidelines for sensitive locations by Oct. 1.
However, the legislature backed away from banning 287(g) agreements, which allow local law enforcement to collaborate with ICE—a key priority for immigrant advocacy groups. Advocates called the decision disappointing given the Trump administration’s intensified deportation efforts, which now target even individuals without criminal records.
Education Policy and the Blueprint for Maryland’s Future
This session brought substantial revisions to Maryland’s landmark education reform in an effort to control costs:
- Funding for community schools (those serving high-poverty areas) was preserved after initial proposals to pause it.
- Teacher collaborative time, a key part of the Blueprint, was delayed for two years to ease budget strain, but per-pupil funding tied to that mandate will still go to school systems in the short term.
- Mental health program funding was restored—$70 million next year and $100 million the year after.
Despite the fiscal constraints, the legislature protected core Blueprint priorities, a major win for public education advocates. However, some funding delays will push back the implementation timeline and will impact local school planning.
Transportation Funding
Despite the fiscal constraints of the session, lawmakers approved funds to address the depleted Transportation Trust Fund:
- $500 million in new revenue, including hikes to vehicle excise taxes, certificate of title fees and a new tire fee.
- This revenue infusion comes as Maryland scales back infrastructure ambitions due to past shortfalls.
For Maryland companies doing business in construction, infrastructure or transportation, the replenishment of the Transportation Trust Fund is a key development. It also reflects the state’s attempt to diversify away from unstable federal funding.
Federal Threats: Trump Administration’s Ripple Effect
A dominant undercurrent throughout the session was Maryland’s mounting vulnerability to federal actions:
- $1.3 billion in projected state losses due to Trump-era cuts and disruptions.
- Thousands of federal job losses in Maryland impacting income tax revenues.
- Frozen or canceled federal grants totaling hundreds of millions, affecting schools, health departments and infrastructure.
In response, legislative leaders announced the formation of a Joint Federal Action Oversight Committee to monitor federal developments and allow for rapid state-level responses, possibly including a special legislative session before 2026.
In Summary
The 2025 Maryland legislative session was defined by compromise under pressure. Lawmakers passed a challenging budget, sought to modernize energy and utility regulation, made partial progress on immigration protections and began preparing for further disruption from Washington. Clients with interests in state policy, energy development, public finance and immigration enforcement should monitor upcoming actions from the governor’s office and potential special sessions in response to federal developments.
For more details on how these legislative outcomes may impact your organization or to discuss the 2026 session, contact Greg Sileo at gsileo@bhfs.com.
This document is intended to provide you with general information regarding Maryland's 2025 legislative session. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.