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Department of Agriculture: transfer-tax decline reduces FY26 funding; Ag land preservation remains a priority
Summary
DLS and the Maryland Department of Agriculture told the Capital Budget Subcommittee that transfer-tax revenue estimates for FY26 reduced available capital funding, leaving the Maryland Agricultural Cost Share program unfunded in the governor's allowance for FY26 but pointing to an existing fund balance to carry operations in the near term; the Ag
Department of Legislative Services analyst presented the Maryland Department of Agriculture's FY26 capital outlook to the Capital Budget Subcommittee, reporting a decline in revenue from the real-estate transfer tax that reduces FY26 capital funding for several agriculture programs.
The DLS presentation flagged two primary changes: a drop in transfer-tax revenue from prior projections, and no explicit FY26 appropriation in the governor's allowance for the Maryland Agricultural Cost Share Program (MACS). DLS recommended the subcommittee concur with the governor's allowance for the Maryland Agricultural Land Preservation Foundation (MALPF).
Why it matters: MALPF and MACS are core state conservation tools. Changes in transfer-tax receipts — a principal funding source for some programs — affect the timing and level of land preservation easement purchases and cost-share support for agricultural conservation practices.
Key testimony points:
- Transfer tax impact: DLS said the underperformance of transfer-tax receipts reduces FY26 funding available for programs typically supported by that revenue stream; the agency reported an under-attainment of roughly $85 million in FY24 revenues that affected FY26 expectations.
- Maryland Agricultural Land Preservation Foundation: DLS recommended conferring with the governor's allowance for MALPF; Department of Agriculture officials emphasized the program's scale: as of 2025 MALPF holds 2,804 easements covering approximately 376,000 acres and the combined federal, state and local funding invested has surpassed $1 billion.
- Maryland Agricultural Cost Share Program: The governor's FY26 allowance does not appropriate new capital funds for MACS, though DLS noted the program had fund balances and expected to operate in FY26 from those balances; the department said it intends to spend down available funds and will seek additional appropriations in future years as needed.
Department of Agriculture officials emphasized MALPF's long-term role in preserving productive farmland and said they would return with requests as pipeline needs require.
Committee members asked for clarification on timing and balances; the department said it expected to use existing balances for the next year but would return for appropriations as projects accelerate.
