Maryland officials got a tiny bit of good news Thursday as they prepare to wrestle with a multibillion-dollar budget hole: The state is projected to have a little bit more money than expected.

But it won’t make a meaningful dent in the deficit, which is projected to be $2.7 billion next year if significant actions aren’t taken.

State financial officials signed off on new projections showing a slight increase in money coming into the state’s general fund, which includes income taxes, corporate taxes and sales taxes — and that makes up about 40% of the state government budget.

“Today’s modest positive upward adjustment to the revenue forecast is helpful, of course,” said state Budget Secretary Helene Grady of the roughly $260 million added to the projections for this budget year and the next, “but it does not change the extraordinary challenge before us.”

The challenge facing Grady’s boss, Gov. Wes Moore, as well as state legislators, is a massive gap between the money coming in and the money going out of state coffers. The spending imbalance has worsened over the years, with officials taking small actions to close the gap each year instead of solving the long-term, structural problems.

The state is legally required to have a balanced budget each year, meaning state leaders will need some combination of revenue growth, additional revenue sources and spending cuts to close the gap when they return to Annapolis in January.

The top budget adviser to state lawmakers warned last month that the spending imbalance is the worst the state has faced in at least two decades.

If left unaddressed, the state would only have enough money to cover 84% of planned spending by 2030, analyst David Romans told lawmakers.

That “enormous gap” is even worse than the state faced in the Great Recession more than a decade ago, Romans said. Back then, budget holes were filled with spending cuts, tax increases and layoffs of state workers.

Since those days, Maryland’s budget has grown significantly, with a particularly large bump in the first years of the coronavirus pandemic, when the federal government sent streams of cash to state and local governments.

As recently as 2018, Grady noted, the state government budget was $44 billion. Now it’s $64 billion.

She noted that any future cuts to planned spending will be coming off of that “all time high level.”

Moore hasn’t yet indicated how he will bring the budget into line; he isn’t required to introduce his next budget until January. After the budget introduction, state delegates and senators will have the ability to review and tweak it before sending it back to the Democratic governor.

But Moore has repeatedly cautioned that tough choices are ahead. At a conference of government leaders this summer, Moore warned: “The next leg of this mission to address our fiscal challenges, it will be harder than the last one. And, right now, everything is on the table.”

Moore was expected to sound a similar theme at another government conference on Thursday night.

Moore has repeatedly said he has a “high bar” for raising taxes, but he hasn’t indicated how exactly he will balance the budget. Proposals have been floated to close corporate tax loopholes, raise taxes on high earners, expand the sales tax to services and legalize internet gambling.

Cutting planned spending could also be on the table, whether to the state’s ambitious education plan known as the Blueprint for Maryland’s Future, or other government programs.

State leaders must also contend with the unknown factor of how Donald Trump’s second presidency may affect Maryland.

The state’s overall economy and the state’s budget are heavily reliant on federal government workers, and any loss of jobs would have a ripple effect. The Republican president-elect and Project 2025 have both targeted the federal workforce.

There are more than 550,000 civilian federal jobs in the Washington, D.C., metro area, including 161,000 in Maryland. Those workers represent nearly 6% of all jobs in Maryland and almost 10% of all wages paid to workers in the state, according to state officials.

Those numbers show “just how intertwined we are” with the federal government, said Comptroller Brooke Lierman, a Democrat.

It’s important, Lierman said, for the state to “de-risk ourselves” from the federal government by growing private-sector jobs.

Lierman said she is optimistic about the state’s economy, but cautious that things might change with Trump’s return to the White House.

“We are navigating a sea of uncertainty as we approach the start of a new Trump administration,” she said.