Maryland Governor Larry Hogan announced preliminary budget recommendations Thursday for the incoming administration of the Governor-elect Wes Moore at a time when the state runs a large budget surplus.
In large part due to huge federal aid during the pandemic, Maryland has an estimated budget surplus of $2.5 billion for the upcoming fiscal year. The state will also have an unusually large amount in its Rainy Day Fund: about $3 billion, or about 12% of the state’s general fund.
Hogan, who prioritized fiscal responsibility during his tenure, urged the incoming administration and lawmakers to maintain a sizeable surplus. The term-limited Republican also urged lawmakers in the Democratic-controlled General Assembly to leave the large stash of reserves in the Rainy Day Fund intact, even as the legislature is acquiring new budgeting powers in the upcoming legislative session. .
“With continued inflation and economic uncertainty nationwide, we believe this is vitally important, and it would be a mistake for the legislature to use its newly expanded budget power to revert to old habits of raiding the Rainy Day Fund or spending recklessly reducing the surplus,” Hogan explained at a press conference.
The new budgeting powers for the legislature were approved by voters in a constitutional amendment in 2020. Previously, the governor of Maryland had unusually strong budgeting authority in the Maryland Constitution, because the legislature was only allowed to cut the governor’s plan .
The state of Maryland already has a new leader. The governorship is now Democratic after the race against Republican candidate Dan Cox, a change that Maryland residents, migrants and community organizations say now brings peace of mind and new hope to the state.
In the next legislative session, which begins January 13, lawmakers will be able to increase, decrease or add items to the budget, as long as the changes do not exceed the total proposed by the governor.
Hogan also maintained that his budget proposal will fully fund priorities like education. He also designated $500 million to help recruit and retain police officers, expand community policing efforts, improve training and teach better de-escalation techniques.
Hogan also proposes $100 million to replace an aging hospital in Easton on the East Coast with a new 230-acre University of Maryland Regional Medical Center.
“This is an idea that the community has been advocating for for years, if not decades,” Hogan said. “It is desperately needed, and we are finally in a financial position to be able to make this critical investment.”
Hogan also announced plans for a $100 million commitment to expand behavioral health services at Sheppard Pratt, including expanded capacity at its new Elkridge campus and a new dedicated children’s hospital in Towson.
The governor stated that the budget proposal includes $10 million for Meritus Health’s plan to build a new School of Osteopathic Medicine in Hagerstown, as well as $10 million for Kennedy Krieger’s plan to build a new Center for Innovative Care on its campus in East Baltimore.
Hogan’s budget team has been working with the incoming administration on the budget for the upcoming fiscal year. Moore, a Democrat, will present the budget plan to the General Assembly on January 20, two days after taking office.
Brian Jones, spokesman for Moore’s transition team, said the incoming administration appreciates Hogan’s suggestions and will continue to work with his administration on the transition. Jones noted that the incoming administration’s final budget proposal will reflect Moore’s “vision and priorities for moving Maryland forward with bold and disciplined transportation investments, strengthening our competitiveness, and providing Marylanders with a world-class education.” .
After Moore proposes the budget next month, the General Assembly will work on the state’s spending plan in its 90-day session.