Maryland governor proposes nearly $149M in midyear budget cuts

Maryland Gov. Wes Moore's administration proposed nearly $149 million in midyear spending reductions on Wednesday to steer more money to help fund child care and Medicaid as state officials continue to wrestle with budget challenges.

Moore will present the cuts next week to the state's Board of Public Works, which has the authority to cut up to 25% of the state's operating budget. The powerful three-member spending panel is comprised of the governor, the treasurer and comptroller, all of whom are Democrats.

“This morning, my administration submitted a plan to make targeted and strategic spending cuts and grow our economy while simultaneously protecting the programs and projects that Marylanders care about most,” Moore wrote in The Baltimore Sun on Wednesday.

His administration decided to propose budget changes early in the fiscal year, which began July 1, to help for future planning. Both the child care program and health care are priorities for the administration.

“We’ve taken a disciplined, data-driven approach that prioritizes investment in areas that connect Marylanders with employment and build new pathways to work, wages, and wealth for all,” the governor wrote.

The need for the spending adjustments has arisen due to larger-than-projected participation in a state program to help pay for child care and higher-than-expected retention of Medicaid participants as Maryland, like other states, has undergone post-pandemic eligibility reviews.

For example, when Moore entered office in January 2023, there were about 24,000 children enrolled in the state's child care scholarship program. By late 2023, that figure had grown to about 33,000 children, the administration says. When the governor prepared the budget for the state's current fiscal year, it was anticipated that 38,000 to 40,000 children would participate, but as of June, that number already had grown to over 40,000.

“Already, we’ve increased the number of children enrolled in the state’s Child Care Scholarship Program by 70% since Inauguration Day,” Moore wrote. “That means an additional 16,000 children and their families are now receiving the support they need.”

The governor also noted that the proposed budget actions “won’t cut a penny for critical priorities, from transportation to K-12 education.”

Maryland's Medicaid enrollment is currently close to 1.7 million statewide, which is just below the state's peak enrollment during the COVID-19 pandemic.

All states are reviewing their Medicaid rolls after a three-year, pandemic-era prohibition on ending coverage expired.

The budget reductions are being characterized mostly as trims across state agencies and grants, with a focus on new initiatives that won't have as much of an impact on services currently delivered to residents.

Moore submitted a balanced $63 billion budget in January for the current fiscal year. It did not include tax increases, but the General Assembly changed the legislation to take in new revenue, including a variety of transportation-related user fees to help pay for transportation projects and tobacco tax increases to help pay for education.

Debate to address longer-term budget shortfalls is expected to resume when the General Assembly convenes in January.

“Every state is dealing with fiscal challenges without federal COVID funding," House Speaker Adrienne Jones, a Democrat, said. "Today’s budget announcement is part of an ongoing process where we’ll look at every option to continue to balance our budget and protect our priorities.”

Senate President Bill Ferguson, a Baltimore Democrat, said he appreciated the administration's thoughtful approach “to addressing difficult fiscal realities while protecting core values.”

“As new data emerges in the coming months, the Senate of Maryland will continue to make the best budget decisions to invest in our residents and grow our economy,” Ferguson said.