Democrats and Republicans from the Maryland General Assembly agree that the state faces sobering budget issues. They disagree on how to address billions of dollars in projected deficits. Photo by Bryan P. Sears.
Lawmakers and Gov. Wes Moore (D) are staking out budget positions with less than a month before the start of the 2025 legislative session that will likely revolve around an “enormous” budget problem.
A debate over taxes, the economy and business climate, and education will all dovetail into efforts to solve billions in projected deficits over the next five years.
“I got to tell you, we have some big issues to share, big issues,” House Minority Whip Del. Jesse T. Pippy (R-Frederick) said Friday to county officials attending the Maryland Association of Counties winter conference in Cambridge. “We haven’t seen a budget deficit like this since the Great Recession. We have big discussions on education, which coincides with the budget issues we’re facing.”
Layered on top, Pippy said, is “an energy crisis in our state. We’re still dealing with the impact of inflation. At the end of the day, all of these things have impacts on everyday, hardworking Maryland taxpayers. It’s becoming simply unaffordable to live in our great state.”
Moore and lawmakers face a projected $2.7 billion deficit for the coming budget year. By the end of the current five-year projection, that deficit explodes to almost $6 billion — nearly all of the shortfall in the outer years is driven by costs related to implementing the education reforms in the Blueprint for Maryland’s Future.
Latest projections released Thursday by the Board of Revenue Estimates showed only marginal improvement in the outlook for the state’s coffers.
“It’s not going to be filled with putting alcohol in grocery stores, I’ll tell you that,” Pippy said, referencing the governor’s call for lawmakers to pass legislation by the end of the session authorizing the sale of beer and wine in grocery stores and other retail outlets.
House Majority Leader Del David Moon (D-Montgomery) told county leaders a year ago that it was time to “pull up some grown-up pants and do something” or face the potential for drastic reductions.
“My message is pretty much exactly the same, that we need to roll up our sleeves, do the hard work, make the tough decisions and not kick a can down the road,” Moon said. “It is my hope that whatever this conversation is, it is one that is looking at the out years, and not just a short-term Band-Aid fix to this problem.”
Budget deficits in Maryland are not rare. Lawmakers are frequently reminded by budget analysts that the state’s ongoing expenses typically increase by about 5% annually. Ongoing projected revenues grow by about 3%.
But in the past, fiscal leaders in the legislature have often taken a one-year-at-a-time approach that leaves wiggle room for the following year.
Moon said he believes the legislature is “swimming” toward a change in dealing with the issue.
The leader of the House Democrats called for a focus on housing, energy, and child care policies, as well as addressing stagnant population growth in the state. He called for six-year plans on each, with benchmarks to monitor progress toward growing the state’s economy.
House Democrats proposed a $1.3 billion revenue package in the 2024 session that they said would address ongoing budget issues. That plan was rejected by the Senate and by Moore.
Both the governor and Senate President Bill Ferguson (D-Baltimore) continue to say they have a “high bar” on the need for broad-based tax proposals.
Last month, Ferguson said “everything is on the table” when it comes to resolving the budget problem, but stopped short of voicing support for broadly increasing taxes.
Some have talked about the potential for making changes in how education reforms are implemented.
On Thursday, Moore warned counties of the difficult budget decisions to come. In an address to MACo, he said he does not favor cuts alone. Instead, he hopes to implement reforms to make the state more business friendly, though he did not provide specifics.
He also called for reforms to the Blueprint.
Republicans and many county leaders – Democrats and Republicans — would also like to see changes as they attempt to absorb the share of the costs passed on to their budgets.
Senate Minority Leader Stephen S. Hershey Jr. (R-Upper Shore) said it’s important “the governor to take a look at that and say simply some things that we can’t afford within the Blueprint. And I do think that we will stretch that (implementation) out.”
Moon said Democrats in the House have a “very high bar for changes to the Blueprint.”