Gov. Wes Moore’s proposal this week to cut nearly $150 million from the current fiscal year’s budget to cover unexpectedly high Medicaid and child care costs leaves unanswered questions about projected multi-billion-dollar budget shortfalls spurred by other spending in the coming years.
 

In May, one of the nation’s top credit ratings agencies downgraded Maryland from a stable to “negative” outlook, driven largely by a massive increase in education spending under an initiative known as the Blueprint for Maryland’s Future, which is expected to more than double to $4.1 billion in annual implementation costs by Fiscal Year 2029 from $2 billion this fiscal year, according to the Maryland Department of Legislative Services. The state deficit, meanwhile, is estimated to reach over $1 billion in 2026 and 2027, nearly $3.5 billion in 2028, and nearly $4 billion in 2029.
 

In unveiling the proposed budget cuts Wednesday — nine days after the fiscal year began — Moore administration officials acknowledged that the state’s “challenges are significant,” but they said that it’s too early to contemplate what the future will hold for next year’s budget.
 

Two days earlier, Gov. Wes Moore told Baltimore Sun co-owner Armstrong Williams during a Monday night televised town hall that Maryland has a “spending problem,” and remained adamant that raising taxes is not the solution. Moore added the state instead should focus on economic growth and re-evaluating spending priorities.
 

“You have to grow your way out of it,” Moore said. “And yes, you have to actually look at the things you’re spending on and say, the things that are working, you spend on that. The things that are not working, stop spending on it.”
 

Moore noted in the Monday interview that Maryland is one of only 14 states to maintain its AAA bond rating with all three major credit ratings agencies. He also said that only weeks before the credit ratings agencies met with his office, the state economy was reeling from the Key Bridge collapse.
 

Meanwhile, General Assembly leaders on both sides of the aisle expressed uncertainty about how the state will address the projected deficits. House Majority Leader David Moon, a Montgomery County Democrat, said Monday that he had wanted the General Assembly to work out the financing for future plans, which hasn’t yet happened.
 

“The Moody’s downgrade in outlook really is signaling what many of us have been saying and seeing for many months now, which is that we do have a looming fiscal challenge that we’re going to have to tackle head on,” he said.
 

Moon added that while he hasn’t seen an appetite from the General Assembly to walk away from the Blueprint, budget cuts will have to be on the table in the next session.
 

“My recommendation to members coming back in January is they have to think long and hard about what they prioritize,” Moon said. “We have tough choices to make.”
 

Senate Minority Leader Steve Hershey, a Republican representing the Eastern Shore, said the governor’s Wednesday budget action “isn’t even close” to a solution on funding the Blueprint.
 

“Given the dire fiscal climate the state is facing, we would expect a true, meaningful downsizing of state government,” he said in an email. “However, there were no real programmatic cuts identified that would even begin to satisfy the looming $3-4 billion annual structural deficit created by the Blueprint.”
 

In response to a question about how lawmakers will stave off budget deficits, House Speaker Adrienne Jones, a Baltimore County Democrat, said in a Monday statement, “We balance our budget every year,” and that lawmakers will “get fiscal briefings, revenue data, and projections throughout the Summer and Fall that will inform our decision-making next year.”
 

In a statement Monday, Moore’s office said the governor “looks forward to working with the Legislature this year to thoughtfully plan the long-term structural solutions which will include continued work to prioritize the state’s expenses as well as a review of our revenue model and how it aligns with our joint objectives and ambitions.”
 

Concerns about paying for the Blueprint are nothing new, said Ike Leggett, chair of the Blueprint’s Accountability & Implementation Board. He added he’s confident the concerns will be addressed, and that the state can’t afford to wait for details on financing to be sorted out while the state deals with an education “crisis.”
 

“You can’t say, ‘Okay, we’re going to wait until we have everything perfect, that every dime is provided, every issue has been resolved, and then we will move forward,’” he said. “If we have to do that… we will never get there.”
 

The General Assembly should consider pressing “pause” on the Blueprint for a year, or at least experiment with the Blueprint in a couple counties before expanding the plan to the rest of the state, said Christopher Summers, president of the conservative Maryland Public Policy Institute.
 

“You have a massive, unfunded mandate here,” Summers said. “How do you afford this?”
 

The governor’s new proposed budget cuts are “a step in the right direction,” Summers added, but the problem ultimately is “magnitudes larger than what he’s trying to solve.”
 

Another strategy for averting deficits would be raising revenues through new taxes. Christopher Meyer, research analyst at the liberal Maryland Center on Economic Policy, supports the Fair Share for Maryland Act, proposed in the last legislative session, which would raise taxes on corporations and wealthy individuals. The only other option, he said, would be severe budget cuts.
 

“We think that going back on the promises that lawmakers made when they passed the Blueprint would be the wrong choice,” Meyer said.
 

In 2020, a year before the Blueprint legislation passed, Maryland ranked 14th in the nation on funding for K-12 education, with more than $18,000 in total revenue per student, according to an analysis from the libertarian Reason Foundation.

Originally Published: July 12, 2024 at 11:09 a.m.