Comptroller outlines modernization and compliance priorities; 6,735 1099‑G forms mailed to wrong addresses

Department of Legislative Services analyst David Probert presented the Comptroller of Maryland’s fiscal 2026 allowance on Feb. 17, 2025, reporting a $309.1 million request — a 41.2% increase over the working appropriation largely driven by major information-technology projects and personnel changes. Probert said the fiscal 2026 allowance includes 117 new positions and major-project funding for a central payroll system replacement, an integrated tax system, and financial management modernization.

Why it matters: The Comptroller’s modernization work — from a new customer-relationship-management system and call-center contracts to a multiagency Financial Management Information System (FMIS) replacement — affects state finance operations, tax administration, and interactions with millions of taxpayers and state employees.

Probert noted the FY26 allowance “increases by $90,100,000 or 41.2% compared to the working appropriation,” with $34.8 million for the central payroll system replacement and $15.7 million for FMIS modernization included among major IT costs. He reported service metrics that prompted the Comptroller’s request: call and email volumes spiked and taxpayer satisfaction with web services fell to 69.2% in FY24.

Comptroller Brooke Lierman (transcript wording corrected from the hearing) and her team defended the modernization push: they have launched a CRM (MyComm Connect) and plan temporary call-center contracts to handle spikes associated with the rollout of Maryland Tax Connect and other systems. Lierman said direct-file participation with the IRS and a new Office of the Taxpayer Advocate are part of the office’s strategy to improve services and outreach.

On compliance, the Comptroller’s office documented a staffing shortfall relative to peer states and flagged an estimated tax gap (about $6 billion of known and unassessed/unpaid liabilities reported in prior work). The office has piloted public-data mining to find unreported online-economy income (short‑term rentals, NFT trading) and is pursuing analytics and data-matching tools to locate previously unknown assets held at modern fintech institutions.

Separately, the office disclosed a printing and mailing error that mispaired cover pages and 1099‑G tax forms, exposing personal information for 6,735 taxpayers. The Comptroller’s office said a printer malfunction caused the mismatch, is offering one year of credit monitoring to those affected, and will stop placing full Social Security numbers on 1099‑G forms going forward. Comptroller Lierman said the estimated cost of credit monitoring will be about $20,000 and described additional checks (multiple reviews of large batches) to prevent recurrence.

DLS recommended concurring with the governor’s allowance; the hearing yielded questions on FMIS future costs, the implementation timetable for ServiceNow/CRM and other modernization projects, and whether increased call-center contracts will reduce average wait times. Lierman said the CRM went live internally in February and that usable service metrics will take roughly 90 days to accrue. She also described FMIS as a statewide, multiagency effort that will require discovery, requirements gathering, and a future RFP before total costs are fixed.

Context and next steps: The comptroller’s modernization and compliance proposals will be considered within the FY26 appropriations process. DLS and the Comptroller’s office will continue to exchange reports and project updates; the mailing error prompted immediate remediation and outreach to affected taxpayers.