Maryland Gov. Wes Moore unveiled his first budget proposal on Friday, a $63.1 billion spending plan that uses a portion of the state’s hefty surplus to boost public education and transportation.
At a State House news conference, Moore told reporters his budget summarized the administration’s values “while being strategic,” and showed that “you can be bold without being reckless.”
The budget also leaves $2.5 billion in the state’s Rainy Day Fund, as well as an $820 million surplus of cash.
“It prepares us to weather the downside risk in the larger economy,” the Democratic governor said. “But it also makes long-needed investments to position us for longterm growth.”
Moore and Helene Grady, the acting budget secretary, cautioned that the state could be in for an economic downturn, so it’s wise to keep some money in reserves while spending on strategic priorities.
The budget will guide state spending for a 12-month period that starts July 1 and is slightly smaller than this year’s budget. There are no tax increases planned.
Moore inherited a strong financial picture from former Gov. Larry Hogan, including billions of dollars of unassigned surplus money, which he plans to use to bolster public education and transportation.
Moore plans to put $500 million extra into the Blueprint for Maryland’s Future Fund, which pays for a sweeping — and expensive — plan to boost the quality of public schools through initiatives including raising teacher pay, improving career- and college-prep programs and creating more “community schools” in struggling neighborhoods.
“This work is critically overdue because too many of our students are trapped right now in a system that chronically fails them,” Moore said.
The extra education money was praised by Cheryl Bost, president of the Maryland State Education Association, which represents the state’s public school teachers.
“His prudent and strategic move to forward fund the Blueprint by $500 million will further enhance the sustainable funding needed to deliver these game-changing investments in our students over the long term,” Bost said.
The $500 million is above and beyond the funding requirements in the law that created the Blueprint. And even with that extra influx of money, the Blueprint will run short of money in a few years as the programs are implemented and costs rise. Funding for the Blueprint now comes from a special fund filled by a variety of revenue sources, including portions of slot machine and sports betting revenues and a portion of sales tax revenues on digital goods. .
Moore hasn’t said how he plans to make sure the fund has enough money in future years, other than he’ll work “in partnership” with lawmakers on that challenge.
Moore also plans to put $500 million extra into transportation projects.
Budget documents show the money could be spent on the “next iteration” of the Red Line, an east-west rail project in Baltimore that was squashed by Hogan in 2015. Additional uses for the transportation money could include road or transit projects to help alleviate traffic in Montgomery and Prince George’s counties and enhancing the commuter rail system.
“You cannot have economic mobility if you don’t have physical mobility,” Moore said about the dearth of public transit options available for low-income individuals. “So we’re making sure that we are creating pathways for people to go from where they live to where opportunities lie.”
Moore also plans to use the budget to attack the challenge of filling thousands of unfilled jobs across state government.
“These level of vacancies, they have human implications on government’s basic ability to do the work,” he said.
The Moore administration estimates there are 6,500 vacant positions in the executive branch, which they plan to cut in half through across-the-board pay increases already negotiated with state unions, targeted pay bumps for hard-to-fill jobs, and conducting a salary study to guide future recruitment and retention efforts.
The budget also includes funding for 589 new jobs across state agencies, including in the Maryland Park Service, the Maryland Department of the Environment, the Office of the Public Defender and the Office of the Attorney General.
Moore hasn’t yet unveiled the policy proposals that he hopes will be approved by the General Assembly, but he accounted for them in his budget, including:
- Making permanent a more generous Earned Income Tax Credit, which lowers the tax burden on the working poor, and expanding eligibility for the Child Care Tax Credit through a proposed “Family Prosperity Act” at a cost of $171 million.
- Enacting a tax cut on military retirement income through a proposed “Keep Our Heroes Home Act,” totaling $33 million in lost revenue to the state.
- Accelerating the increase of the minimum wage to $15 per hour by this fall, including $413 million more in funding for organizations that provide care to people with intellectual disabilities or behavioral health concerns.
- Creating a cabinet-level Department of Service and Civic Innovation, at a cost of $18 million.
- Recruiting more teachers to public schools through incentives in a proposed “Maryland Educator Shortage Act,” at a cost of $15 million.
- Incentivizing business creation and growth through a proposed “Innovation Economy Infrastructure Act” with $10 million in funding.
Scrutiny from lawmakers
Moore’s budget proposal will now be reviewed by state lawmakers, who for the first time have additional authority to move around money within the budget.
Democratic leaders said they don’t expect that they’ll need to use that authority, and they believe the governor will work collaboratively with them on any changes.
Moore hosted key lawmakers — mostly Democrats, but at least one Republican — for breakfast at the governor’s mansion on Friday morning to go over some of the details of the budget with them. Such breakfasts were routine for years, but rarely during Hogan’s administration.
Democrats emerged from the meeting with no complaints.
House Speaker Adrienne A. Jones, a Baltimore County Democrat, said, “We’re very pleased with what we saw.” She later added in a statement: “The governor’s budget demonstrates that the legislative and executive branches of government can work together to make critical investments while being fiscally responsible.”
“This is going to be a governor who is really going to work with us on the budget,” said Sen. Nancy King, the Democratic majority leader in the Senate. “We’re really happy.”
In a press conference, Senate President Bill Ferguson said the governor’s budget proposal aligned with the legislature’s priorities.
Sen. Guy Guzzone, who chairs the Senate committee that reviews the budget, said he expects “back and forth” budget negotiations to continue through the legislative session.
“And I’m looking very much forward to that,” said Guzzone, a Democrat from Howard County.
Republicans began poring over budget documents on Friday and are working to have a briefing with Moore’s budget team next week.
They quickly identified a couple areas of concern, including a reduction in some crime-fighting grants and less money for a private school tuition assistance program known as BOOST, said Del. Jason Buckel, the Republican minority leader in the House of Delegates.
On the campaign trail, Moore promised to eliminate funding for BOOST, which pays for students to attend private schools. Given that the program helps working-class and middle-class families, Buckel said, “I would suggest that goes against the stated concept of leaving no one behind.”
Buckel is hopeful that Republicans will be able to restore those funds and have influence through the budget process.
“There’s certainly a long process to work through from the day the budget comes out to the day the budget is finalized,” he said. “We’ll see how this shakes out. I wouldn’t suggest the budget we’ve seen today is 100% of what gets passed. I don’t know if it will be 95% of what’s passed.”