Acknowledging the newly forecasted $1.2 billion structural deficit for fiscal year 2027, the General Assembly‘s Spending Affordability Committee approved recommendations Thursday to cut and stockpile funds to protect the state from further negative actions that could come from President Donald Trump’s administration.
“I think the theme you can see in these recommendations is being fiscally prudent and fiscally conservative,” said Sen. Jim Rosapepe, the Senate chair of the Spending Affordability Committee. “The reality is that we’ve got problems, because we’ve got a big problem in Washington.”
Rosapepe pointed to the fall shutdown of the federal government — with the potential for another in January — and the repercussions that had on social safety net programming like SNAP.
“The risks caused by the Trump administration to the people of Maryland and to the budget of Maryland are huge,” he said.
David Romans, a fiscal analyst for the nonpartisan Department of Legislative Services, predicted Thursday that Gov. Wes Moore, a Democrat, and the Maryland General Assembly will have to contend with a $1.2 billion deficit as it looks toward fiscal year 2027.
That figure is lower than the earlier $1.4 billion that was projected.
Romans told the committee that lawmakers will need to find $600 million in “ongoing savings,” or cuts, in the forthcoming budget negotiation process. He also recommended they maintain at least 8% of General Fund revenues, or $2.2 billion, in the state’s Rainy Day Fund, while maintaining a minimum General Fund balance of at least $100 million.
In a statement after Thursday’s meeting, House Minority Leader Jason Buckel, R-Allegany, expressed frustration at the state’s current fiscal situation, saying that the past year “has proven we cannot tax and spend our way out of Maryland’s budget deficit crisis and economic stagnation.”
During the 2025 legislative session, Moore and the General Assembly addressed a nearly $3 billion budget deficit through a series of cuts as well as new and increased taxes and fees that were projected to bring in approximately $1.6 billion in revenue.
“Intelligent cuts, including delays to the Blueprint, reversing our rapid expansion of Medicaid over the last several years, and an actual freeze on state government employee spending beyond needed public safety personnel, are obvious and imperative actions Governor Moore and the Maryland General Assembly must take this legislative session,” Buckel said. “Without these actions, we see another wave of tax increases.”
“Maybe not this year, but definitely after the election.”
In November, House Ways and Means Committee Chair Vanessa Atterbeary, D-Howard, said that there will be no tax increases in 2026.
Last week, Atterbeary announced that she is resigning from the General Assembly effective Jan. 14.
While it’s looking more likely that the fiscal year 2027 deficit will be closed by budgetary slashes, the Blueprint for Maryland’s Future education reform policy is likely safe from cuts. This could be attributed to a 1% drop in enrollment among public schools statewide from Sept. 30, 2024, to Sept. 30, 2025.
According to Romans, the $1.2 billion in the Blueprint Use Fund and ongoing revenues will cover the landmark education policy for fiscal year 2027, preventing lawmakers from needing to tap into the General Fund to continue its rollout.
However, because of the enrollment decrease, counties could see less state money for their school systems.
Pointing to recent actions taken by the Trump administration, Romans recommended that the General Assembly build up a bigger balance in the state’s Catastrophic Event and Disaster Recovery funds, noting that money through FEMA disaster assistance has been harder to come by.
After May floods ravaged areas in Allegany and Washington counties, the Moore administration applied for financial disaster recovery assistance from FEMA, which the Trump administration ultimately denied.
Moore administration officials put the damage estimate from the flooding at $33.7 million, which is nearly three times the qualifying threshold for federal assistance.
Because of the federal government’s reservations regarding providing disaster assistance through FEMA, Romans recommended that Maryland stockpile at least $15 million in case of environmental emergencies “since we may be in a position of needing to fund more of these costs ourselves in the future.”
According to Romans, the average annual FEMA assistance for Maryland has been approximately $21 million annually, “so $15 million gets us pretty close to covering, kind of, the typical experience that we have,” he said.
