Gov. Wes Moore has a promise about the state budget he’ll propose on Wednesday: “We’re not raising taxes or fees.”
Democratic leaders of the Maryland General Assembly, who have the ability to tweak and revise Moore’s budget, have sounded a similar theme.
“We are going to have to balance the budget. We’re going to have to make some cuts,” House Speaker Joseline Peña-Melnyk told reporters. “Taxes is not on the table.”
Senate President Bill Ferguson put it this way: “I don’t see us pursuing revenues as an option this year.”
But without raising money through expanded or increased taxes, that leaves difficult choices for closing a $1.4 billion gap between money coming into state coffers and money going out — with freezing or cutting funding for state programs likely.
Moore’s budget will open that conversation Wednesday, and House and Senate lawmakers will respond with revisions to the governor’s plan in the following weeks.
Unlike the federal government, the state government is legally required to have a balanced budget each year.
The budget gap isn’t as bad as it was last year, when the imbalance grew to more than $3 billion. The governor and lawmakers balanced that budget through a combination of spending cuts and more than $1.6 billion in new and expanded taxes.
Some of those taxes hit high earners, while others — including increased taxes on car and cannabis sales and a newly created 3% tax on information technology and data services — affected a large swath of Marylanders.
The year before that, lawmakers raised hundreds of millions by increasing taxes and fees on vehicle registrations, electric cars, Uber and Lyft rides and nicotine and cigarette products.
People noticed those fees and taxes and are feeling the pinch, Republican lawmakers argue.
Del. Jason Buckel, the House minority leader, said he thinks Democrats “have lost their appetite for tax and fee increases.”
“It’s an election year and they literally passed just nine months ago the largest tax and fee package in Maryland history,” said Buckel, who represents Allegany County.
If the governor and lawmakers don’t raise taxes or fees, that means they’ll be looking for spending cuts. That could manifest in giving some programs less money than in the year before, or by simply flat-funding programs and not giving them their typical year-over-year bump.
State Sen. Guy Guzzone, who chairs the Senate’s budgeting committee, said raising new money “is always the last thing you do.”
“There will be a mixture of both one-time cuts ... and there will be some level of structural cuts also — a combination of the two, and that’s how we’ll get through this year,” said Guzzone, a Howard County Democrat.
Where will the cuts come from? No one is saying just yet.
One program that should be safe from cuts is the Blueprint for Maryland’s Future, the long-term public schools improvement plan. Though the Blueprint’s fund won’t have enough money in future years to pay for planned programs like prekindergarten expansion and improved career prep, it has enough money for now.
“There is no need for cuts to the Blueprint fund for this year,” said Del. Ben Barnes, chair of the House’s budgeting committee. “It is good to go.”
Guzzone noted that the Blueprint will undergo an overall review later this year, to see which programs are working well and which need adjusting. That could inform changes to the Blueprint in 2027.
“We’re going to have to reassess it all,” he said. “We’re going to have to figure out what is most critical in all of it.”
The governor said the state’s general fund — which is the largest portion of the budget and gets money from state income, corporate and sales taxes, and the lottery — will be smaller than it was last year.
“I believe in the things that we support, that it needs to be both effective and sustainable. That if things are not effective and they’re not sustainable, that we shouldn’t be investing it,” Moore said. “That’s what I think we’re going to see with the budget.”
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