Senate President Bill Ferguson (D-Baltimore City) warned that lawmakers will need to find hundreds of millions in new taxes and budget cuts to offset expected cuts in federal aid. (Photo by Bryan P. Sears/Maryland Matters.)
Maryland’s Senate president said Friday that lawmakers will likely have to look for “several hundred million” in additional cuts or taxes to cover expected decreases in federal aid.
Senate President Bill Ferguson (D-Baltimore City) blamed the new gap on what he described as “tax cuts for billionaires” he expects to come from congressional Republicans in Washington.
“I wish I had good news to share. Unfortunately, I don’t,” Ferguson said during a weekly meeting with reporters. “It’s important to start making it clear to Marylanders and agencies that there’s there’s more cuts to come with that.”
Ferguson issued the warning after legislators from Baltimore City held a virtual meeting with Sen. Chris Van Hollen (D) earlier that morning.
“These are not normal times,” Van Hollen told city lawmakers in that meeting.
Ferguson expressed concern about looming reductions in the federal workforce and how that would affect the state economy. Additionally, he expressed concern about the funding to replace the Francis Scott Key Bridge.
Congress in December passed a stopgap spending plan that included 100% federal funding to replace the bridge that collapsed last spring after being struck by a cargo ship. The continuing resolution that included that funding runs out in March.
“If there’s not a continuing resolution moved forward by the Republican majority in Congress, then all of that is subject to being cut,” Ferguson said.
The Senate leader said additional cuts from the federal government would make it difficult for the state to pay for some services at existing levels. When asked how much more the state could absorb, Ferguson said, “Not much more than where we are currently.”
“And I would say even at this point, we’re … looking through each of these programs and make sure that we are getting the highest and best value that we can because it’s going to get tighter and tighter,” he said.
Ferguson expressed concern about congressional Republicans’ plans to “pursue tax cuts for billionaires on the backs of shifting costs to the states for Medicaid assessments.”
Van Hollen said he and other Democrats were awaiting Republicans to release their budget plans.
“I find this to be very likely to be part of their proposals,” Van Hollen said. “When they do their tax cut for the wealthy, I do expect that will include cuts to Medicaid.”
Spiking costs of Medicaid — a cost the state splits with the federal government — have been blamed for part of a $3 billion deficit that Maryland faces in its fiscal 2026 budget. A shift to 47% federal and 53% state funding could have dramatic effects on the state budget.
“We know that Medicaid has been a driver of some of our challenges in the state,” Ferguson said. “Additional cuts to Medicaid or additional cost shifts will have an absolutely devastating impact on the state of Maryland, and so when we look at the challenges that we’ve been facing at the beginning of session, we said, we have to see what the actual data shows. The reality is, it’s worse than we expected, and what’s coming down from the federal government.”
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Ferguson predicted “a very sobering conversation about what this budget looks like in the next 30 days.”
There are a number of revenue proposals sitting in front of lawmakers. Moore himself has proposed a set of tax code changes he described as “simplifications” that would cut taxes for roughly two-thirds of Marylanders. More than 80% would see a cut — maybe no more than a few hundred dollars — or no change at all.
Nearly one in five taxpayers — those earning $500,000 or more — would pay more.
Ferguson said hundreds of millions in cuts would still be needed “even if we did all of the revenues” already being proposed.
“This is largely because of what we’re seeing from the Trump administration’s impact on the state government here in Maryland and the provision of services,” Ferguson said.
The legislature “likely will not do all of them,” he added.
“I think we’re going to have to really look at deep cuts,” he said.
“There’s only so much that we can get through any type of revenue plan, and we have to remain competitive in the region and nationally,” Ferguson said. “And so, I think this is going to be a rebasing year when it comes to spending.”
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