Gov. Wes Moore introduced his $70.8 billion budget proposal for the 2027 fiscal year Wednesday, complete with approximately $1.8 billion in reductions via cuts, fund transfers and cost sharing.
“Marylanders — they’re counting on us to hold the wall,” Moore, a Democrat, said at an Annapolis news conference Wednesday. “They’re counting on us to tackle everyday problems with discipline, with persistence, with bold and tangible solutions — not just today, but for tomorrow.”
The governor’s balanced budget proposal sews up a $1.4 billion structural deficit without raising or implementing new taxes and fees.
The legislature is constitutionally required to pass a balanced budget during its regular 90-day legislative session. This year, Moore proposed a $70.8 billion operating budget, with a $2.6 billion capital budget for all fund sources.
The Senate will have the first look at Moore’s proposal this year.
Wednesday morning, Moore said his proposed budget encompasses three pillars: public safety, affordability and economic competitiveness, which the governor emphasized by noting a $124 million investment in local law enforcement and $352 million in housing supply and community revitalization.
But the cuts are coming.
“Here is what I want everyone in the state to understand: Being fiscally responsible and being fiscally disciplined does not mean we stop investing in what matters most to the people of the state of Maryland, but it does mean we’re going to be more targeted,” Moore said. “We’re going to be more data-driven about how we invest.”
Under the proposal, the General Fund is poised to contain $27.2 billion. The Rainy Day Fund will be reduced to 8%, which will contribute $145 million to the General Fund.
Among the multitude of fiscal shifts and cuts, $150 million in funds from the Local Income Tax Reserve that were previously incorrectly allocated to local governments instead of the state, and $292 million from the Maryland Strategic Energy Investment Fund, will be transferred to the General Fund.
The Fiscal Responsibility Fund, which was tapped during the fall’s federal government shutdown, will lose $187 million. According to a Moore administration official, money in the Fiscal Responsibility Fund typically comes from one-time revenue sources.
Additionally, rather than providing state employees with a 2% cost of living adjustment and step increases, Moore’s budget proposes a 1.5% adjustment and the modification of certain pay scales, potentially saving the state $120 million. Moore’s proposed budget also withholds rate increases for providers at the departments of Health, Human Services and Education, netting an additional $79 million in savings.
The embattled Developmental Disabilities Administration, under Moore’s proposal, is poised to lose $150 million in funding.
Department of Budget and Management Acting Secretary Jake Weissman said Wednesday morning that the Maryland Department of Health has had “over 90 meetings” with representatives of the developmentally disabled community to discuss how to continue providing services while making programs more sustainable.
“This is a tough issue, but it’s one that we must tackle in a collaborative and bipartisan manner,” said Weissman. “We believe the approach we are taking is a balanced approach. We are not wedded to it as the only solution, and we look forward to continuing to engage and work with the community on preserving the DDA program.”
A little more than $322 million that would have been used for projects under the capital budget will be moved to the General Fund.
Between the capital and operating budgets, $105 million has been set aside for legislative priorities this coming fiscal year.
Senate Minority Leader Steve Hershey, R-Upper Eastern Shore, said that though increased taxes aren’t there “at first glance, there is a lot beneath the surface that gives us pause,” like shifting existing funds to “support ongoing spending.”
“Now that the budget is in the hands of the General Assembly, we’ll see how it ultimately takes shape—but what’s missing is a firm commitment from the Governor to stand against any tax or fee increases that could be added during the legislative process, especially given what Marylanders experienced last year,” said Hershey.
House Minority Leader Jason Buckel, R-Allegany, said that Moore’s proposal “is largely based on accounting tricks and adjusting anticipated spending increases rather than meaningful changes in budgetary policy.”
“I have seen nothing in the Governor’s budget proposal that addresses the long-term issues that have created these giant budget holes,” Del. Jefferson Ghrist, R- Upper Eastern Shore, said in a statement. “We are just setting Marylanders up for another round of tax increases after the election. It is disappointing.”
The Moore administration also opted to adopt three revenue-netting measures as proposed under President Donald Trump’s One Big Beautiful Bill that passed over the summer, which will come at the cost of the state, including a measure to reduce the number of years that the Research and Experimentation Expenditure can be taken from multiple to just one.
The state would additionally be decoupling from two tax provisions under Trump’s bill — the Qualified Production Property Deduction and the Bonus Depreciation. Moore administration officials say this would save the state approximately $15 million.
“Congress does not make Maryland tax law,” said Weissman. “Maryland and its elected officials make Maryland tax law.”
However, under Moore’s proposal, the state is dishing out $43 million in increased administrative costs to implement portions of the federal legislation, including the addition of 25 new positions in the Maryland Department of Health to assist with changes to Medicaid expected to go into effect by the end of the calendar year.
In all, Moore’s proposed budget creates 419 new state government positions, abolishes an existing 207 and converts 45 from contract to full-time. These positions would be able to be filled in spite of the state’s ongoing hiring freeze.
