Gov. Wes Moore’s leadership under fire, ‘Maryland definitely has a management issue’

MANCHESTER, Md. (WBFF) — Questions are mounting about the state’s management and the governor’s leadership as Maryland faces a historic budget deficit that ballooned to $3.3 billion, alongside substantial proposed tax and fee increases.

A last-minute business service tax bill introduced earlier this week in the Maryland General Assembly has Tyrone Keys preparing for a potential 2.5% tax hike.

Maryland definitely has a management issue,” Keys said. “They refuse to entertain options that would bring in revenue over the long term, and that would look to attract businesses, families, individuals into this state to start paying into the existing tax base.”

Referred to as the ‘business-to-business’ tax, the initiative could tax essential business services that rely on other companies for performance, such as marketing, financial planning, tax preparation, information technology, and labor services.

Key’s business preparations and worries are not siloed.

At his rural Carroll County home, Manchester Town Councilman Ryan Nazelrod, who runs a part-time landscaping business to support his family of five, also expressed uncertainty. He told Spotlight on Maryland that he’s worried about affording another potential 2.5% reduction to his business’s income, in addition to many other tax and fee hikes that may be passed.

“I feel like it was said we are going to tax richer people, and the middle class is going to be left out of it, but I am a middle-class guy,” Nazelrod said. “If my [costs] go up, I have to afford for my family as well, and any business that’s taxed, they often pass those taxes on to the customer.”

It’s putting us in some very tough spots to make some difficult decisions as business owners that we don’t want to make,” Nazelrod added.

Pressure on Maryland lawmakers to balance the state’s budget intensified on Thursday after the Maryland Bureau of Revenue Estimates (BRE) announced that the state would fall short of its income, corporate, and sales tax forecasts by $280 million for fiscal years 2025 and 2026.

Spotlight on Maryland pressed state Democratic budget leaders in Annapolis moments after the revised numbers were announced regarding the BRE’s write-down. Lawmakers were asked what role the state plays in the lower-than-expected revenues that have contributed to Maryland’s historic deficit of $3.3 billion.

“What you seen today is 100% based on the actions of Donald Trump, DOGE, and Elon Musk,” Del. Ben Barnes, D-Anne Arundel and Prince George’s Counties, responded. “What Donald Trump said he was going to do, he is now doing.”

Part of the revenue write-down for fiscal year 2025 resulted from lower-than-expected tax collections in calendar year 2024. President Trump could not have influenced the state’s income during that period since the presidential election’s outcome was not determined until November.

Del. Matt Morgan, R-St. Mary’s County agreed with his colleague that the write-down would have widespread effects on the state but said the responsibility lies outside of Washington. As chairman of the newly launched Maryland Freedom Caucus, Del. Morgan said that the state’s fiscal crisis is the result of Gov. Wes Moore’s leadership.

The lawmaker said the governor’s silence on the business-to-business tax is deafening.

For the last two months, he has been talking about the ‘Growth Agenda’ here in Maryland, and we are going to bring business back and make it easier,” Del. Morgan said. “We need some leadership coming out of his office saying this is not the direction.”

Meanwhile, Keys said hiring 5,000 new state employees since Gov. Moore took office is an example of “questionable leadership decisions.” The governor’s spokesperson previously told Spotlight on Maryland that at least 3,300 of the new positions can be attributed to his budget proposals and priorities.

“The state should be run under the same general practices that Fortune 500 companies run by,” Keys said. “The biggest expense in any organization is the human resource’s part, so where can we find efficiencies, where we can either put a freeze on hiring or start to reevaluate the workforce as is?”

State personnel data reviewed by Spotlight on Maryland showed that the new jobs created since Gov. Moore took office in January 2023 average an annual salary exceeding $78,000. Additionally, these positions have an average total benefits package of over $51,000 per hire.

These new positions cost Maryland taxpayers an estimated average of $425.7 million annually, according to calculations based on state data.

Spotlight on Maryland sent Gov. Moore’s office a series of questions on Saturday morning, including:

• Will Gov. Wes Moore sign the business-to-business tax increase of 2.5% if the state legislature passes the bill?
• What leadership actions will the governor take to ensure key aspects of his budget and his ‘Growth Agenda’ advance to his desk?
• Will the governor consider furloughing state employees or cutting the state workforce by 3,300 to 5,000 positions to lower potential tax hikes that may harm the budgets of the state’s roughly 6.3 million residents?
• Does Gov. Moore believe the state legislature has hijacked his ‘Growth Agenda?’

The governor’s office issued an extensive statement that did not directly address many of the questions posed by Spotlight on Maryland. Writing that Gov. Moore “inherited an economic flatline,” a spokesperson attributed much of the state’s current shortfalls to former Gov. Larry Hogan’s administration.

“The decimated state government that Gov. Moore inherited was not properly serving the people that it represented and the governor wholeheartedly believes that in order to ensure the best public schools, safe streets, and a growing economy that Maryland must have a fully-functioning government to provide those services,” Gov. Moore’s office wrote.

Nazelrod said that the governor should voice his opposition to the business-to-business tax and confront state lawmakers about the potential financial burdens that the Maryland General Assembly is considering imposing on businesses and residents.

Government can increase jobs, and I want those people to have good jobs, but to put that burden on the taxpayer, that money has to come from somewhere, and evidently it’s from me,” Nazelrod said.

Keys said that the Democratic leadership of the state assembly’s decision to reject the governor’s call for alcohol sales in grocery stores and the recent reinstatement of millions in funding for the Blueprint for Maryland’s Future after Gov. Moore removed it from the budget is noteworthy.

He suggested that the governor’s influence on state policy may be starting to become questionable.

“[T]he legislature is supposed to jockey for power, but you may not have as much of that coming from the executive because Wes Moore is a new governor and look,” Keys said. “I think everybody knows, he’s not fully focused on the State House,”

“He has his eye on, you know, bigger fish,” Keys added.

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Spotlight on Maryland is a joint venture between FOX45 News and The Baltimore Sun.