Maryland's Bullion Budget Bummer — And What It Means for Silver

When my Dad took a new job and moved us from Pittsburgh to Baltimore in early 1974, one of the first things I learned about my new home state of Maryland was its nickname: “The Land of Pleasant Living.”

For many years, Maryland living has been very pleasant. We’ve got the powerful Baltimore Orioles baseball team, a great minor league club just up the road in Aberdeen, an NFL team that plays in the powerful AFC North, great historical sites like Fort McHenry, tourist spots like the B&O Railroad Museum and the National Aquarium — and more.

And, for many years, the state leaders in Annapolis were fiscally responsible — meaning the Maryland government delivered years of budget surpluses.

This year, those safety-net surpluses disappeared.

The state is now facing a $3.3 billion hole for Fiscal 2026 — its worst deficit in two decades.

The causes are many.

The deficit is due to “inflation and the spike in health care costs. An underwhelming local economy. The approval of new taxpayer-backed initiatives that carry both large and relatively small price tags. Sidestepping ideas for reliable new revenue and, in some cases, intentionally reducing the amount of money that leaders have to work with,” says the Maryland Public Policy Institute, a conservative think tank that espouses free enterprise and limited government.

Lawmakers are angling to fill that hole with a combination of spending cuts, new levies and other budgetary “sleight of hand” moves, which could really impact Maryland’s competitiveness.

Those proposed moves include:

• Increasing the sports-wagering tax rate from 15% to 20% — a change expected to generate $32 million in new revenue.

• A jump in the cannabis tax rate — from 9% to 12% — a move that could raise $39 million.

• A 2% surcharge on capital gains income over $350,000 — a levy that would raise an additional $367 million.

• A 3% sales tax on IT and data services — a tax that could raise nearly $500 million.

• And repealing an exemption for sales of coins and bullion in excess of $1,000. The change leaves an exemption for sales made specifically at the Baltimore City Convention Center. CoinWeek clearly views this as an insidious move, topping its story with the headline: “Maryland Lawmakers Try to Sneak Bullion Tax Into Budget.”

There’s a hefty list of others budget moves. But I highlighted the ones I chose because they either affect Maryland’s competitiveness, affect investors directly — or both.

But, for now, let’s talk about the “Bullion Budget Booster” — since we’re in on commodities … and precious metals like gold and silver.

Silver Expert Peter Krauth

The one-two punch of escalating uncertainty and a looming long-term supply shortfall in key commodities bodes well for the long-term prices of gold and silver.

We’ve talked about silver at length here, as my longtime friend and colleague Peter Krauth believes it could hit $40 an ounce this year and $300 or beyond in the years to come — a scenario he detailed in his 2022 book “The Great Silver Bull.”

Peter is a renowned metals-and-mining-stocks expert who now runs the Silver Stock Investor, an investment publication focused exclusively on the “common man’s precious metal.”

I interviewed him when we launched Stock Picker’s Corner (SPC) early last year. And again for our Forecast 2025 investing series at the start of this year.

So to understand the potential impact of Maryland’s budgetary blues, it made total sense to turn to Peter again.

“I have to say, Bill, that it’s sad to see that Maryland wants to tax metals purchases, which would make it one of the few states to do so,” he told me. “I don’t know how much Marylanders buy of precious metals, but I can only imagine those who want gold or silver will just go to a neighboring state that doesn’t tax precious metals – and buy there. Of course, that’s terrible news for Maryland bullion dealers who will lose business to those competitors. As long as it’s only a handful of states that do this, demand will remain strong as buyers have alternatives. It would surprise me if it had any effect on bullion prices.”

Bad Romance (With Money)

So while it may not impact metals prices, it joins some of these other moves — like the levy on data-security services — in potentially damaging Maryland’s competitiveness.

According to Bullionstar, Maryland ranked a dismal 40^th on the “Sound Money Index,” which categorizes each state’s “friendliness” toward gold and silver bullion.

And that was before this new bullion tax was proposed in Annapolis.

We’ll keep following this “state silver saga” for you. And I’m looking to bring in a metal’s lobbyist and policy-shaper for one of our interviews.

I’ll keep you informed.

See you next time;