As state analysts determine exactly how the recent federal reconciliation bill — the One Big Beautiful Bill Act — will impact funding and policies in Maryland, Senate President Bill Ferguson said Monday that the state appears to be on stable financial ground, for the time being.
“It’s hard to say exactly, but with the information we have today, I feel that we are going to be in a place where we can have a level and stable budget, and it will not be the level of pain and gap closing that we were trying to deal with last year,” Ferguson said during a virtual call with reporters.
To balance the budget and leave the state with a cash balance amid projections of a $3.3 billion shortfall, Democrats voted last session to raise certain taxes and fees to generate about $1.2 billion in general fund revenue, cut approximately $1.6 billion in spending and shift about $800 million in costs to save more money, among other measures.
Those who spearheaded the plan, including the governor and his team and the budget committee chairmen in the legislature, said it would prepare the state to weather federal funding cuts in the coming years.
Lawmakers will have a clearer sense of the degree to which President Donald Trump‘s policies have changed Maryland’s financial footing when the state Board of Revenue Estimates releases its September report, though Ferguson said Monday that “early indications don’t show a dramatic dropoff.”
Top Democrats have been particularly concerned about cuts in the One Big Beautiful Bill Act — championed by Trump and Congressional Republicans — to safety net services like Medicaid. The cuts will free up funding to pay for tax cuts, the largest of which are expected to benefit the country’s top earners and corporations.
Potential added costs for the state in the next year aren’t expected to be as drastic as some had initially feared, though many changes to Medicaid in the reconciliation bill won’t take effect until late 2026.
Maryland is also expected to lose up to $2.7 billion in federal funding annually when the bill is fully implemented. The state will incur the majority of its losses between July 2026 and June 2028.
The Maryland Department of Health has projected that about 175,000 people in the state will lose health care coverage under Republicans’ One Big Beautiful Bill Act.
It remains to be seen what policy or funding changes state health officials and lawmakers will consider to prevent some people from losing their health care coverage and to boost community safety nets for those who do.
The senate president said that he and others are trying to determine which programs the state may be able to subsidize, though he acknowledged that programs predominantly reliant on federal funding will likely see cuts.
