Maryland Tax Court proposes budget increase amid growing appeal backlog

The Maryland Tax Court is facing significant challenges as it navigates a growing backlog of appeals, highlighted in a recent budget discussion by the Appropriations Committee. The court, which serves as an independent state agency for reviewing decisions made by Maryland's taxing authorities, reported a 50% increase in appeals filed in fiscal year 2024 compared to the previous year, totaling around 1,100 cases. This surge has led to a concerning rise in pending appeals, with the clearance rate falling to 72%, well below the court's goal of 90%.

The proposed fiscal year 2026 budget reflects a modest increase of approximately $15,500, or 1.6%, bringing the total budget close to $1 million. A significant portion of this budget—91%—is allocated for personnel costs, with notable increases earmarked for salaries and cost-of-living adjustments. However, the court also anticipates a decrease in health insurance costs for employees and retirees.

The court's struggles with backlog are attributed to several factors. A high number of postponement requests—3,406 in fiscal year 2024—have extended the duration of appeals. Additionally, the court's reliance on outdated paper-based processes has hindered efficiency. The current database, over 20 years old, lacks modern features that could streamline operations, such as online submission of appeal documents. Efforts are underway to modernize this system, including collaboration with the Attorney General's office to explore legal changes that would allow for online submissions.

The Tax Court has made strides in improving its clearance rates over the past two fiscal years, successfully meeting its 12-month clearance goal. However, the ongoing challenges with the 8-month clearance goal remain a priority as the court seeks to enhance its operational efficiency and better serve Maryland residents.

As the Tax Court continues to address these issues, the community will be watching closely to see how these changes impact the timely resolution of tax appeals, a critical aspect of ensuring fairness and transparency in Maryland's tax system.