As Maryland heads into the 2025 legislative session, the state’s budgetary challenges are coming into sharp focus. Recent projections from the Board of Revenue Estimates paint a sobering picture: slight revenue increases for fiscal years 2024 and 2026 are not enough to stave off a looming budget gap that could balloon to nearly $6 billion by fiscal 2030. For CPAs and other professionals, the stakes are high—and so is the need for targeted advocacy.

The deficit dilemma
Lawmakers are grappling with a projected $2.7 billion deficit for fiscal 2026, a figure that underscores broader structural deficits threatening Maryland’s fiscal health. Sales tax and lottery revenues have underperformed, while the state’s economy has yet to fully recover from the disruptions of the pandemic. These trends, combined with Maryland’s heavy reliance on federal employment and contracts, create significant vulnerabilities. Any shifts in federal workforce policies or funding could further disrupt the state’s already strained revenue streams.

Why CPAs must engage
For Maryland’s CPAs, these fiscal realities underscore the critical importance of advocacy during the 2025 session. Proposed solutions to close the budget gap may once again include tax reforms, with a potential broadening of the sales tax to include professional services posing a significant threat. This would directly impact CPA firms and their clients, increasing costs and administrative burdens while discouraging business growth and investment in the state.

CPAs are uniquely equipped to provide legislators with valuable insights into the broader implications of such proposals. By emphasizing the administrative complexities and economic ripple effects of a sales tax on professional services, CPAs can effectively advocate for policies that support Maryland’s business community rather than hinder its growth.

A call to action
Maryland’s CPAs play a vital role in shaping the state’s fiscal future. Addressing the challenges ahead requires proactive solutions to close the budget gap without jeopardizing the profession's economic strength or the clients they serve. By opposing a sales tax on professional services and advocating for sound fiscal policies, CPAs can help ensure Maryland’s long-term economic stability.

Join us for CPA Day in Annapolis on Jan. 16 to make your voice heard and help influence the decisions that will shape Maryland’s fiscal policies.

Let’s make this session count.