Senate President Bill Ferguson talks about the upcoming legislative session Jan. 7 in his office inside the State House in Annapolis. Photo by William J. Ford.
The Senate president is warning Maryland lawmakers they will have to walk a tightrope this session to maintain state priorities while bridging a $2.7 billion budget deficit — and that’s before potential cuts to federal funds that the state relies on.
Or, as Senate President Bill Ferguson (D-Baltimore City) put it in an interview Tuesday: “Cuts are coming.”
If cuts aren’t enough, he said, revenue increases are also on the table.
“We need to live within our means. Everything is on the table to adjust formulas or … projected expenses,” Ferguson said. “We have to take a measured approach, which is going to be a hard conversation — something that we haven’t had to do over the last six years because of the federal funds that are available.”
The 2025 legislative session that convenes Wednesday will need to close a $2.7 billion budget gap in fiscal 2026, a shortfall that will worsen in years to come if the state does not address the deficit now.
Ferguson warned that there will be “adjustments across the board,” as lawmakers consider trimming current projects and evaluate programs to see which are effective and where money could be spent elsewhere.
“We’re really preparing our members and folks to know that we have to live with what’s feasible,” he said. “If we can’t get there on cuts alone, then we will have to look at revenues.”
In the case that tax increases are considered, Ferguson wants to the state to “take a progressive approach – those who have made more and benefited more will have to likely contribute more.”
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“The vision for that is going to be, number one, protecting Maryland families from rising costs. Anything we do to achieve additional revenues is really going to try to avoid your average family seeing increased prices,” Ferguson said.
“So, we have to focus on those who have done well with and have benefited from Maryland’s economy, who have benefited from the stock market, who are making $500,000 to a million dollars in capital gains in a single year — (they) may have to participate more in order to help us make sure that we can do things like provide dental care to seniors on Medicaid,” he said.
“We’re also going to look for places where revenue is being sheltered by businesses or there have been deductions in the past that maybe are not as productive as need be,” Ferguson said
He said raising revenues “is the last option … but it is not off the table. We’re going to try to live within our means first, and then if we can’t get there fully, we’ll have to explore different revenue measures.”
Amid potential cuts, Ferguson wants to keep as many people on Medicaid as possible.
“These are Marylanders who truly are the most vulnerable. I believe fundamentally that we have a duty as a public sector to help provide for their needs,” he said. He said any revenue increases could help maintain current Medicaid programs and enrollment during the fraught fiscal year.
That said, “there may also be places” in Medicaid that the General Assembly may need to “adjust.”
“Every aspect of state government should expect a top-to-bottom review and the potential for a new reality moving forward,” Ferguson said.
That includes the Blueprint for Maryland’s Future, the state’s massive education reform, he said.
“We are not going to pull back on our commitment to Blueprint,” Ferguson said. “The good news is that the budget challenges we have today are not related to the Blueprint – it has been fully funded through FY ’27 with special funds. If we made changes to Blueprint, it wouldn’t affect the bottom line, it would just extend the special fund for a longer period of time.”
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Besides dealing with the budget, Ferguson said the Senate will put “a lot of focus” on energy policy this session.
“There is some very real concerns about increasing cost of energy, of electricity, here in Maryland, because of decreased supply and increased demand,” he said. “We have to leave session creating opportunities to mitigate that.
“We’re going to spent a lot of time this session really honing in on our energy marketplace to expand with an all-of-the-above approach to solar, onshore wind, geothermal, nuclear and natural gas, and doing so in a way that is really protecting ratepayers from that rising costs,” he said.
Working with Trump
But those plans and others could run smack into the incoming administration of President-elect Donald Trump’s (R), who has pledged deep cuts to federal funds and federal agencies. Ferguson said massive federal cuts could be “devastating for Maryland,” where more than 140,000 workers had federal jobs in March, according to the Congressional Research Service.
“The economic impact (of the Trump administration) is the biggest concern,” Ferguson said. “Hundreds of millions of dollars in contracts, billions of dollars of contracts, that come through government contracts and defense contractors … I’m hopeful that it is not as draconian as it is being projected, but we have to be prepared for it.”
The game plan for the state is to play nice with the Trump administration, agreeing where priorities align and avoiding conflict “where we can” in an effort to protect Maryland’s current support through federal funding.
One area where the state and the Trump administration may conflict is on immigration: Trump has promised to deport millions of undocumented immigrants in his second presidency.
“I am also concerned around the immigration front, that there is not an overreach in the application of federal laws, and that we don’t create terror in communities,” Ferguson said. “I am very concerned on how that plays out and the psychological impact of that.”
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He said that state and local authorities will work alongside federal agents to “make sure that the people that commit violent crimes are deported…. But creating fear in and anxiety in immigrant communities, I think that’s something that we’ll be very mindful of.”
That said, the state is reluctant to buck the Trump administration too much, for fear of antagonizing the White House and risking the loss of federal support. That extends to Maryland possibly losing the new FBI headquarters planned for Greenbelt. While Ferguson believes that plans are too far along to easily change directions and build the new FBI campus elsewhere, he says the state will get a better picture in the first 60 days of Trump’s term.
“We are very reliant on the federal government,” Ferguson said. “And so there are a lot of places where we’re highly exposed that if we actively participate in opposition, there could be huge implications for Marylanders who live here. And that’s not something we want to facilitate.
“We will start from the premise of working together and hope that that’s where we stay,” he said.