Maryland is facing a projected $3 billion budget deficit for Fiscal Year 2026, beginning July 1, 2025. Analysts warn that the state’s budget outlook is worse than during the Great Recession of 2007 to 2009.
Maryland Senate President Bill Ferguson said lawmakers must find hundreds of millions in additional budget cuts to close the deficit beyond the $2 billion in reductions proposed by Maryland Gov. Wes Moore.
“We are deeply going through the budget and looking for every place we can make additional adjustments in cuts,” Ferguson told reporters, Feb. 11.
A Washington Post-University of Maryland poll shows that voters oppose some of Moore’s proposed cuts to the Blueprint for Maryland’s Future. The Blueprint, a 2021 law that increases public education funding, is one of the state’s most expensive initiatives.
Among Moore’s proposals, limiting teacher pay raises drew the strongest opposition, with 76% of voters against and 19% in favor. The Blueprint originally called for increased teacher planning time, but Moore suggested continuing current levels to prioritize hiring more teachers — an idea that garnered the most approval, with 76% voter support.
Additionally, 58% of voters opposed Moore’s proposals to freeze extra services for high-poverty schools and delay prekindergarten expansion.
Maryland began covering AP exam fees for all students regardless of income in the 2023–2024 school year. However, the state’s Association of Superintendents recommended limiting coverage to only low-income students to reduce budget constraints. About half of voters support this change, which would require many students to pay the $99 fee for most exams.
Advocates resisted the proposed cuts to the Blueprint during a four-hour legislative hearing, Feb. 19. Moore did not attend but sent aides to summarize the bills and answer lawmakers’ questions. Moore’s Chief of Staff, Fagan Harris, reaffirmed the administration’s commitment to the Blueprint.
“This governor is committed to seeing the Blueprint through,” Harris said. “That’s why we’re proposing this legislation.”
Superintendents, teachers and educators testified against the bill, warning that funding cuts to education could have serious consequences. Lawmakers scrutinized the proposals for a variety of reasons. Democrats largely opposed reductions affecting underprivileged students, while Republicans argued the cuts did not go far enough to address the Blueprint’s financial burden.
Maryland’s public universities could eliminate 400 jobs as part of Moore’s proposed $111 million reduction to the University System of Maryland. Officials plan to cut unfilled vacancies and temporary positions, saving about $45 million. The remaining $55 million in reductions would likely come from decreased financial allocation to student aid, supplies and travel expenses.
Moore also proposed tax changes that would raise taxes for wealthy residents while lowering them for low-income individuals. His plan would eliminate itemized deductions, which allow taxpayers to lower taxable income through expenses like charitable donations, medical expenses and mortgage interest. In exchange, Moore proposed doubling the standard deductions for all residents, increasing the portion of income that remains untaxed.
He also suggested a 75-cent delivery fee on large-company orders and tax increases on sports betting and cannabis. According to the Bureau of Revenue Estimates, these changes applied to 2023 tax returns would have generated about $600 million to help close the deficit.
Further complicating Maryland’s budgetary challenges, the Trump administration plans Medicaid cuts and federal job eliminations. Medicaid currently covers about 1.8 million low-income Maryland residents, providing free or low-cost health insurance. Federal cuts would force the state to increase spending or reduce coverage, potentially leaving vulnerable residents without essential healthcare. The Trump administration has already laid off tens of thousands of federal workers, which economists predict could become the largest job cut in U.S. history, negatively impacting local economies.
On Feb. 20, the Moore administration announced that budget cuts for the Developmental Disabilities Association (DDA) would be delayed until July 1. The decision followed significant opposition to $200 million in proposed cuts, including a rally outside the Maryland State House that drew hundreds of advocates.
State health officials said the cuts are necessary to curb the DDA’s unsustainable expenses. While delayed until Fiscal Year 2026, the cuts remain a concern as advocates continue pressing lawmakers to protect DDA funding.
Maryland’s paid family leave program was set to begin in July 2025, but state officials have proposed an 18-month delay due to budget constraints. The Family and Medical Leave Insurance (FAMLI) program has already faced previous setbacks, and supporters argue that Maryland families cannot afford further delays to the long-awaited program.
Emily Shetty, a delegate from Montgomery County, proposed a statewide two-cents-per-ounce excise tax on sugary drinks, syrups and powders. While no state currently imposes a statewide tax on sugar-sweetened beverages, several cities have implemented similar measures. The proposed tax could generate about $500 million annually, directing funds toward free school meals and childcare subsidies, and addressing the budget deficit.
In his annual State of the State address, Moore urged elected officials to be ready to make tough decisions to resolve Maryland’s fiscal challenges. He called for bipartisan cooperation to tackle the crisis.
“Let’s put the politics to the side,” Moore said. “Let’s answer this crisis with courage. Let’s rally together as one state and as one people, and let’s render these two storms, as we always have and as we always will, together.”
