BALTIMORE — Maryland faces a projected budget shortfall of about $1.4 billion for the next fiscal year, according to a spending affordability committee briefing in Annapolis. The state constitution requires a balanced budget, meaning lawmakers must either cut services or increase taxes and fees to address the deficit.
We watched the committee briefing to break down what this means for Maryland residents. These briefings provide crucial details about the state's financial health and what changes could be coming.
WATCH: Maryland faces projected $1.4 billion shortfall for next fiscal year
In recent years, similar budget shortfalls have led to higher costs for car registration and tobacco products, along with a new tax on IT services. The state also made cuts to a massive education spending plan.
Democrats in the state house are attributing the budget issues to federal-level decisions during Donald Trump's administration, a claim supported by the committee's report.
"You can see Maryland has lost about 15,000 federal jobs, it's a decline of 9.3%. And we actually have the largest percentage decline of all the states," Tuszynski said.
Maryland depends heavily on federal spending compared to other states. Republicans have consistently argued that Maryland relies too much on the federal government.
“There is no doubt that federal actions impact Maryland, but the degree to which that is true is a direct result of the Democratic leadership’s overreliance on Government spending," said Delegate Jesse Pippy, a Republican from Carroll and Frederick counties.
The DLS report showed that a loss of revenue and an increase in revenue is leading to the shortfall.
"On the spending side, spending is about $800 million higher than we forecasted and it's not one big item, it's a few big items there," Romans said.
The timing complicates potential solutions, as 2026 is an election year. Gathering more money from Maryland residents or cutting crucial services could become fodder for attack ads.
The state will receive one more budget update in December before Governor Wes Moore releases his budget proposal in early January.
The Governor's office says it opposes tax increases.
"Ongoing issues in DC are affecting every state in the nation, and none more than Maryland. We knew this session would bring difficult fiscal challenges, and have already begun working collaboratively with our partners in the General Assembly to develop solutions that will ensure a balanced budget that protects Marylanders and reflect the values of this Administration," said Jake Weissmann, the acting secretary of the Maryland Department of Budget and Management in a statement.
Senate President Bill Ferguson released the following statement after the meeting.
“The highest and best use of the General Assembly’s time is keeping Maryland on strong fiscal footing by lowering costs for Maryland families and addressing the $1.4 billion structural deficit so we can meet our constitutional obligation to pass a balanced budget next session.”
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