Economists told The Baltimore Sun that Gov. Wes Moore’s claim to whittle down the general fund would require slashing education and health care programs, providing little to no relief for Marylanders anytime soon. Taxpayers are still reeling from last year’s tax hikes, they added.
Democrats and Republicans differ on what cuts Moore needs to make, but they both agree that cuts are essential to addressing the state’s financial woes. However, Democrats argue that the question of when the strain on Marylanders’ pockets will end can’t be answered until after the November elections. Republicans argue Democrats won’t touch the economic relief topic to avoid jeopardizing their chances of winning elections this year.
Moore told The Baltimore Sun he will “present a budget that actually decreases the size of the general fund,” a statement he repeated multiple times in interviews with other news outlets and at public events. The general fund is made up of a variety of taxes collected by the state, including individual income, retail sales, and alcohol and tobacco taxes.
Moore’s office didn’t respond to multiple requests for comment to clarify the governor’s statement.
Marylanders will see how much of the fund Moore will cut in his upcoming budget proposal, which state law mandates he submit it by Jan. 21. But it’s unknown what programs will be funded less and to what extent. [““]
Kali Schumitz, vice president for external relations at the Maryland Center for Economic Policy, said in order to do this, according to Moore’s plan, education and health care programs — which make up two-thirds of the general fund — would be on the line.
“There could be things that people see in terms of longer wait times if you need to call a state agency and get help with something and they’re understaffed,” Schumitz told The Sun, concerning what could be impacted. “Or right now, our childcare scholarship program is frozen. Anyone who qualifies and is trying to get assistance with paying for childcare, they’re on a waiting list until other families leave the program. [With Moore’s proposal], we’re probably not addressing that.”
Juan Pablo Martinez Guzman, a professor at the University of Maryland’s School of Public Policy, said Moore’s claim neglects the fact that other state revenue sources could end up bearing a larger burden of financing state programs.
The Blueprint for Maryland’s Future, Guzman said, is financed by the special fund, which is made up of taxpayer dollars collected through car registration fees and state property taxes, among others. If Moore’s budget decreases the general fund, more taxpayer dollars — through the special fund — could be pulled to finish the Blueprint for Maryland’s Future initiative, which is a multibillion-dollar education reform plan.
“A lot of the spending pressures for the state are coming from the Maryland Blueprint for education, and much of that spending happens on special funds, not general funds,” Martinez Guzman told The Sun. “Education expenditure last year in the general fund increased by approximately $300 million. However, on special funds it increased by about $700 million.”
GOP leaders argue that the Blueprint is too expensive and has not yielded corresponding improvements in student achievement or school safety. Moore, however, insists his administration remains committed to funding public education.
Addressing deficit amid climbing costs
As the governor’s budget proposal looms, state Democratic and Republican lawmakers agree that cuts must be made to close a projected $1.4 billion deficit without putting even more financial strain on taxpayers. The task is an even taller order because of adversities that Marylanders have faced this past year — including over 25,000 federal job cuts and skyrocketing groceries, electricity and rent costs.
Moore and other senior Maryland Democrats have repeatedly pledged not to hike taxes. However, Senate Minority Whip Justin Ready argued Democrats won’t directly engage in economic relief talk because it’s too lofty a promise to make during an election year.
“You could get to rolling back some of the things that have just been implemented on the tax side, and some things you could do pretty easily, but you would have to say, ‘We’re going to tell a lot of special interest [groups] like education special interests and environmental special interests [that] we’re not going to be increasing spending on your program this year,” Ready told The Sun.
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Economists have previously said closing the deficit will also likely require tapping the state’s $3.5 billion Rainy Day Fund, which Maryland typically treats as an emergency cushion for short-term economic shocks. Still, they warn that would leave little leftover in cases of unexpected fiscal troubles such as a recession.
But House Majority Leader David Moon said the answer for economic relief “will have to be visited after the November elections.”
“If we have a check and balance on the system there, we can get the pipeline of funds that are already owed to us and are being illegally obstructed,” Moon told The Sun, adding that the federal government has withheld hundreds of millions of dollars from Maryland. “We have very few tools at our disposal within the federal system to hold this administration accountable. We’re sort of on our own and left to the Attorney Generals to try and recover these funds in court.”
Del. Anne Kaiser, vice chair of the House Appropriations Committee, the leading house committee in charge of negotiating the budget, shared the sentiment, adding that “of course” Democrats “are protecting our most vulnerable populations.”
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