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Addressing Maryland State Budget Deficits Past and Present by David Reel

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In William Shakespeare’s play — The Tempest in the Teapot — he wrote: “The past is prologue.”

In other words, one way to anticipate what to expect in the future is to study the events of the past. History often can and does repeat itself.

This is good advice with regard to the Maryland General Assembly’s 90-day session that begins on January 13, 2027, and ends on April 12, 2027.

Among a wide range of public policy issues prior to adjournment, a majority in both the House and Senate must agree on a state budget for submission to the governor for final approval. The Maryland Constitution also mandates that the budget be balanced, at least on paper.

Achieving that outcome will encounter significant challenges next year and beyond.

In a recent post in Maryland Matters, Will Hammann and Adam Lipman wrote that “Governor Moore’s office currently projects a deficit of $2.8 billion in fiscal year 2028, growing to $4.5 billion by fiscal year 2031.”

If the past is indeed prologue, look no further than the decisions made on projected state budget deficits during the 2025 and 2026 General Assembly sessions.

The majority of the General Assembly and Governor Moore reached agreements on how to address budget deficits projected to be $3.3 billion in fiscal year 2025 and $1.4 billion for fiscal year 2026.

The agreements included:
•    Spending cuts
•    Issuing bonds
•    Fund transfers
•    “Rainy Day” fund transfers
•    Higher income tax rates for certain high-income taxpayers
•    Expanded applicability of the state sales tax
•    New state fees
•    Increases in current state fees, most notably those for motor vehicle registrations
•    More state mandates on education spending for local governments
•    A sales tax on digital advertising (since declared by a court to be unconstitutional)

While a “little bit of everything” approach may work in the short term, it is not sustainable.

Governor Moore recently visited the Maryland State Fair as part of his ongoing and official re-election campaign, while continuing his unofficial campaign for election to a higher office.

During that visit to the fair, Spotlight on Maryland reporter Gary Collins asked Governor Moore a series of questions
Question one: Would Moore pledge to rule out more tax increases and no state fee increases? The answer was no.

Question two: Would Moore vow to reduce state taxes and fees? The answer was no.

Question three: What should taxpayers expect on a state budget in the 2027 General Assembly session? The answer: “The state must balance its spending needs with affordability.”  Moore did not elaborate with any details on how to achieve that balance.

Question four: Moore was asked about the state’s economy. The answer was “Thanks for asking the question”, which was followed by Moore walking away.

His answers, and in one case, no answer, are not surprising. Moore is running for re-election. If he wins, as is widely expected, he has until January 20, 2027, to present his proposed state budget and plans to fund it to the General Assembly.

If his proposals are comparable to those proposed and approved in the 2025 and 2026 General Assembly sessions, the past will certainly be prologue.

Whatever strategy Moore pursues, he will be challenged by ever-changing and unpredictable internal dynamics in the General Assembly.

Historically, Democratic Governors could count on Democratic supermajorities in the House of Delegates and the Senate for support for their policy initiatives. Not anymore.

Those Democratic supermajorities today are far from monolithic. They include traditional liberals, moderates, and self-identified progressives.  All have strongly held and sometimes divergent positions on state spending priorities and how to pay for them.

Progressives have been steadily increasing their numbers and their influence in the General Assembly, especially in the House of Delegates.

These progressives routinely and strongly oppose state budget spending cuts, support more state government spending, and support tax and fee increases to help fund that spending.

Despite those differences, in 2027, a majority of General Assembly members and the governor will eventually agree on a state budget and how to fund it. Past will be prologue

After that happens, Marylanders should not be surprised if funding the budget results in more state tax rate increases, more state taxes, more new state fees, and more state fee increases.

They should also not be surprised if there are minimal state spending cuts or if there are none.

Maryland voters unhappy with those outcomes need to accept the fact that a governor, all 141 state delegates and all 47 state senators were elected to four-year terms in 2026. There will not be opportunities to vote for a peaceful regime change in Annapolis before the primary and general elections are held in 2030.

AI Disclosure: The Spy and its writers may use artificial intelligence tools to support accuracy and clarity in our reporting.

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