Maryland Gov. Wes Moore proposed a $63.1 billion spending plan that will pay for the salaries of thousands of state workers who run programs ranging from unemployment benefits to mental health hospitals, as well as send aid to local governments for police and schools.
The spending plan sets up the state to deal with a shortfall both in the budget year beginning July 1 and for the increasing budget gaps expected in future years.
Here are some key points to know about what the Democratic governor has in mind for how to spend state tax dollars.
No tax increase
The Democratic governor came into this budget season facing less-than-rosy financial picture: Not quite enough money coming in to pay for all of the expected expenses. Some were concerned that Moore would turn to tax increases to close the gap.
Moore found ways to bring the budget in balance, and boost spending in some areas, without any tax hikes.
“We are focused on four priorities,” Moore said Wednesday. “We will make Maryland safer. We will make Maryland more affordable. We will make Maryland more competitive. And we will continue to make Maryland the state that serves.
“And we can achieve each of these goals without raising taxes on Marylanders.”
How did Moore do it? The short answer is that he found targeted cuts and ways to move money around, opted to borrow more money for construction projects — instead of paying upfront — than in the past few years, and took a modest withdrawal from the state’s Rainy Day Fund.
A new word for budget cuts
The word “rebasing” is a new one inside State Circle, and as described by Moore and his team, sounds pretty much like budget cuts.
Moore said his team scrutinized the state budget, paying particular attention to programs and departments whose budgets grew significantly during the past few years, thanks largely to an influx of federal coronavirus aid.
With that federal aid drying up, some of that growth is no longer sustainable or is not justifiable, he said. So those programs’ budgets are being scaled back — in some cases, a slight rollback, in other cases, all the way back to pre-pandemic levels.
Moore administration officials were careful not to use the word “cuts” to describe these budget moves, preferring to call it “rebasing.” Moore used the term at least eight times in his State House news conference on the budget yesterday.
Rainy day not here yet
Moore is proposing taking money of the the Rainy Day Fund, something that governors typically try to avoid. That’s because having money built up in savings not only gives the state a financial cushion, but also helps it maintain a high bond rating, keeping interest rates low when it borrows money.
Moore intends to take $150 million out of the $2.5 billion Rainy Day Fund and use that money for transportation. The money will go to the D.C. Metro System, freeing up other money in the state’s transportation budget to avoid proposed cuts for programs ranging from highway mowing to mass transit system maintenance.
The Rainy Day Fund lands at $2.34 billion in Moore’s budget proposal. That amount is the equivalent of about 9.4% of the state’s general fund, which is the biggest portion of the state budget, and is in line with a guideline of keeping at least 8.5% in the Rainy Day Fund.
Moore said the withdrawal from the Rainy Day Fund will buy himself and lawmakers one year “as a bridge” while they work out better ways to pay for transportation projects.
Moore’s budget proposal is now in the hands of the Maryland General Assembly. Delegates and senators on the legislature’s budgeting committees will hear from each state department about their budget, and they’ll review recommendations from nonpartisan analysts.
Lawmakers have the relatively new ability to not only cut the governor’s proposed budget, but also move money around within it — a power they gained last year after voter approval in 2020.
The Senate will review, change and pass the budget first, then the House of Delegates will take its turn. Ultimately, the legislature will send the revised budget back to the governor before the end of the General Assembly session on April 8.
This article has been updated to correct the year when voters gave lawmakers additional power over the state budget.