Federal budget decisions, and the potential for special state legislative sessions, loom larger in Maryland. (File photo by Jane Norman/States Newsroom)
A three-week blitzkrieg of federal budget actions by President Donald Trump (R) is fueling a level of budget uncertainty and angst among Maryland officials.
The deepening concern about federal impacts has made discussions about one or more special sessions more than just theoretical, at least for some lawmakers. Senate President Bill Ferguson (D-Baltimore City) said he and others are tearing the budget apart “line by line” looking for potential cuts to offset reductions in federal aid.
“We are anticipating it getting worse,” Ferguson told reporters Tuesday. “We want to make sure that we have all the options on the table, so that when we have more information, come the end of March, we can make the soundest decisions possible.”
Even so, Ferguson and others said it is likely the state faces tough decisions.
“We simply do not have the funds to backfill those potential cuts,” he said.
Cuts to Medicaid, even shifting costs back onto the states, could result “some restriction of services overall,” Ferguson said.
Gov. Wes Moore (D) and lawmakers entered the session staring down a $3 billion budget deficit projected for fiscal 2026. Ferguson and others are concerned that continued efforts to cut federal employment to the bone and cut or eliminate programs and agencies will mean billions more in problems for the state and private institutions.
Sources within the Moore administration told reporters during a background briefing Tuesday they continue to be concerned about proposals to reduce Medicaid to offset federal tax cuts.
“It looks like a lot of core Maryland programs are in the crosshairs,” Ferguson said. “And so that is going to leave us with the very challenging question of how much, or whether we can backfill these massive cuts to core programs, or whether we can continue to do them at all.”
Those same officials said they expect an executive order that could potentially eliminate the U.S. Department of Education. Also of concern are reductions to agencies such as the Environmental Protection Agency.
Those same state officials said some state government departments continue to have trouble accessing federal funding despite the withdrawal of a Trump administration memo freezing funding.
Nearly two-dozen states including Maryland sued in federal court to block a Trump administration attempt to slash federal funding for medical research. On Monday, a federal judge in Massachusetts blocked the change. A full hearing on the issue is scheduled for later this month
If the changes stand, Maryland, with its overreliance on what is called “Eds, Meds, and Feds,” could feel the impact more acutely than some other states.
Johns Hopkins University could see reductions of $650 million to $700 million, Ferguson said. Proposed cuts to the U.S. Agency for International Development would take as much as $800 million from Johns Hopkins alone, he said.
Already, two companies in Montgomery County have warned the state Commerce Department of layoffs of more than 600 employees.
A federal judge has also temporarily blocked the Trump administration actions agianst USAID, as well. It is unclear, however, if Trump intends to abide by the orders.
“It is worse than I expected — the number of things that are on the chopping block and the degree of uncertainty that is being created by agency indecision and agency inaction, in some cases, to follow court orders and the requirement to have multiple temporary restraining orders to release funds that were congressionally appropriated,” Ferguson said.
As the legislature continues to craft a budget for fiscal 2026, Ferguson said lawmakers are waiting for March 13, when the federal government potentially runs out of money as a continuing resolution expires.
The federal budget calendar is becoming increasingly important to lawmakers who are beginning to look at windows around key dates for potentially scheduling special sessions.
“I’ve been doing this all my life,” said Senate Budget and Taxation Chair Sen. Guy Guzzone (D-Howard), who was a legislative assistant to Florida Rep. Bill Nelson in the 1980s. “I’ve never seen this level of overall chaos.”
Guzzone said the idea of a special session — or maybe more than one — to adjust the state budget in real time is becoming less and less theoretical.
“The enormity of this — it’s hard to wrap your head around what’s real and what is not, what will ultimately be dealt with by the courts,” Guzzone said. ” All of this is on top of the initial challenges of our budget.”
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