Gov. Moore budget proposal closes shortfall without new taxes

Maryland Gov. Wes Moore proposed the next year’s state government budget Wednesday, closing an expected budget gap through strategic cuts and adjustments instead of raising taxes.

“Drafting this budget wasn’t easy. It was hard,” Moore said during a State House press conference. “We are operating under very tight constraints and very tight realities.”

The total budget proposal is $63.1 billion — slightly smaller than the current year’s budget — and will govern spending on state programs and services for a 12-month period starting July 1.

Moore said his team took a hard look at how state government functions and made decisions based on the effectiveness of programs and whether they’ll promote economic growth and prosperity.

Moore’s budget team relied on four types of maneuvers to bring the budget into balance.

• “Rebasing” funding levels. For programs whose budgets swelled during the pandemic, Moore proposed cutting funding back closer to pre-pandemic levels, though Moore carefully avoided the term “cuts.” The Moore administration gave as examples grants to private universities, community college funding and money for the state lottery.
• Reallocating money between areas. Moore proposed moving money from underutilized areas of the budget into other needs. For example, some special funds sit in accounts that accrue interest. The money made off of that interest, instead of sitting in the account, can be transferred to the state’s general fund.
• Borrowing more money. When the state’s budget was flush with cash the past few years, some of that cash was used for construction projects instead of borrowing money and spreading the cost over several years. The state is returning to borrowing more money for construction projects but is still within guidelines for maximum borrowing.
• Tapping the Rainy Day Fund. The governor proposes to pull $150 million out of the state’s savings to pay for transportation needs on a one-time basis. The account maintains a $2.34 billion balance.

The overall budget would have had a deficit of about $1 billion without those cuts and adjustments, Moore administration officials said. Now the budget has a very slight surplus of about $103 million.

Although some of the savings went to close the anticipated budget gap, some also went to increases in other areas, including: creating a new gun safety center, expanding a promising program for juvenile offenders, boosting child care assistance, increasing participation in the state’s service program for young people, and building housing and revitalizing communities.

The Democratic governor is also setting aside $100 million for the FBI’s proposed new headquarters in Greenbelt. And state employees will see increases in their paychecks.

A program called BOOST that pays private-school tuition for some children that came under fire last year is proposed for $9 million, its current funding after back and forth among the governor, state Senate and the House of Delegates last session.

The moves also cut the structural deficit in the general fund — the biggest pot of money in the budget — from $761 million to $502 million.

That means that, although the budget will be in balance for the next year, as legally required, officials must consider how to ensure a balance in future years. Moore is betting that growing the economy and making housing and child care more affordable will result in more money coming into state coffers in future years.

“This budget is about working to improve value for our taxpayers while we strengthen our competitiveness,” Budget Secretary Helene Grady said.

Various tax increase ideas have been circulating in Annapolis, and Republican leaders were glad Moore’s proposal did not include tax hikes.

“We are certainly pleased to see there were no tax increases,” said Sen. Stephen Hershey of the Eastern Shore, the Republican minority leader in the state Senate. “There’s some maneuvering of funds, but that’s to be expected in the budget process.”

“I think Governor Moore and his political advisers and his administration understand that a governor promoting significant tax increases in a state like Maryland — where most people feel they’re already overtaxed and the cost of living is high — is a recipe for political disaster,” said Del. Jason Buckel of Western Maryland, the Republican minority leader in the House of Delegates.

That doesn’t mean Marylanders concerned about taxes can fully breathe a sigh of relief, Buckel cautioned. He believes there’s still interest among some Democrats in targeted tax increases, particularly looking at the state’s long-term structural deficit that remains unresolved. There are more than 80 days left in the General Assembly session for those debates among lawmakers to play out.

“I don’t think that story is completely written,” Buckel said.

Unlike Republican leaders in Annapolis, the chairwoman of the Maryland Republican Party issued a statement blasting Moore’s budget proposal. Party Chairwoman Nicole Beus Harris decried Moore’s “reckless spending,” which she said turned a surplus into a “budget crisis.”

“Governor Moore likes to claim fiscal responsibility in his FY25 budget, but there is nothing responsible about spending hundreds of millions of dollars on unnecessary new programs while allowing the budget deficit to continue, raiding state rainy day funds, and slashing funding for core government services,” Beus Harris said in the statement.

Though lawmakers were only just starting to comb through the four volumes of budget books Wednesday, the Republican leaders said they conceptually like Moore’s idea of evaluating government programs for effectiveness. But they acknowledged that members of the two parties may have different views on which cuts and changes are worthwhile.

“We want to make sure that anything that’s done with regard to cuts or defunding is done on the appropriate programs that just aren’t effective,” Hershey said.

Senate President Bill Ferguson, a Baltimore Democrat, called the governor’s proposal “a normalized budget.”

“We’re getting back to normal. We’re returning to normal times in revenues and making the adjustments as needed,” Ferguson told members of the Senate.

Though this is Moore’s second year in office, this represents the first budget proposal that is truly his own. The budget for the current year was largely prepared by outgoing Republican Gov. Larry Hogan, and Moore’s team had little time to make tweaks before presenting it to lawmakers two days after he was sworn into office.

“One of the most important responsibilities of the executive branch, and also the legislative branch, is to craft and enact a balanced budget that reflects the needs of the state,” Moore said. “We know that budgets, they are moral documents. Where we choose to invest that actually defines our values and dictates the course of our future.”

Moore’s budget proposal now goes to state lawmakers, who will scrutinize it and make their own changes. That process kicks off in earnest Monday afternoon, when nonpartisan analysts present their analysis of the governor’s proposal to the General Assembly’s budget committees.

Baltimore Banner reporter Brenda Wintrode contributed to this article.

Pamela Wood

pamela.wood@thebaltimorebanner.com

Pamela Wood covers Maryland politics and government. She previously reported for The Baltimore Sun, The Capital and other Maryland newspapers. A graduate of the University of Maryland, College Park, she lives in northern Anne Arundel County.

More from Pamela Wood

Alsobrooks was outspent and trailed in polls. Her campaign said they never panicked.

May 15, 2024

Maryland set to oust problematic prison and jail health care provider. It’ll be costly.

May 15, 2024

More From The Banner

Maryland hospitals took money from poor patients. Why haven’t they paid them back?

Secret in the walls: Hidden letters reveal love, lust, scandal in 1920s Baltimore society

Grieving my brother and the Key Bridge

Sheila Dixon, a ‘filthy’ street and residents who want politicians to put up or shut up