When it comes to the state of state government finances, Marylanders might be forgiven if they are a bit confused. On the one hand, there is Gov. Wes Moore’s claim that he inherited a $3 billion deficit that he has turned into a surplus while providing a tax cut for most households. On the other, there is former Gov. Larry Hogan and his allies who say Moore has done the opposite turning a $5 billion surplus they handed him into that $3 billion shortfall that had to be addressed through a combination of higher taxes and spending cuts approved in the last Maryland General Assembly session.
And it gets even more tangled than that. There’s also the matter of how Gov. Moore initially described the state as being in a “fortunate financial position” after his election in 2022. And how Maryland benefitted, at least in the short-term, from billions of dollars in COVID-19-related federal relief funds, a point Gov. Hogan doesn’t necessarily mention. And then there’s the Blueprint for Maryland’s Future, the K-12 education reform plan that added billions to state and local budgets — a measure opposed by Hogan but nevertheless approved during his time in the State House. Hogan tends not to include it in his budget calculations even though the spending is now mandated under law. His obstinacy is one reason why state lawmakers gave themselves greater authority to increase state spending no matter the governor (and Maryland voters overwhelmingly ratified that constitutional change in 2020).
What’s the reality? It’s complicated but with one certainty: Every governor has a selective, self-promoting vision.
Think of the annual state budget as strictly a 12-month assessment. The governor and lawmakers are required to keep it in balance. So whether it’s Moore or Hogan, a Democrat or Republican, there are no budget shortfalls, not in that one-year time frame. That’s why, for example, you can have a “rainy day fund,” as Maryland’s Revenue Stabilization Account is often informally called, to cover short-term ups and downs. And you can simultaneously face longer-term deficits in the outyears that won’t necessarily become a problem — if you take corrective action sooner instead of later.
Hogan can claim a surplus during his watch by ignoring certain long-term costs like the Blueprint. Moore can see the same numbers differently by taking a broader view. As for why the Democrat did not criticize his Republican predecessor earlier, one can only assume it came down to a matter of messaging, with Moore thinking it better served his political purpose to project a more inclusive view of Maryland’s electorate. After going through a bruising budget-balancing session last spring, the current governor is clearly not inclined to excuse Hogan’s failure to attempt to fund the Blueprint.
“We entered the session committed to solving problems, not scoring political points,” Moore wrote in a commentary published in The Sun last April. “Our decisions don’t fall neatly into red-vs.-blue boundaries.”
Still, it’s fair to criticize some of the more controversial choices passed by the General Assembly. The new income tax on high earners, the capital gains tax and, most controversial of all, the new tax on information technology services are expected to collectively generate more than $1 billion in revenue in the fiscal year that started July 1. But the budget plan also resulted in $2 billion in cuts — including scaling back Blueprint reforms while providing less for certain services for the disabled and for child care with an overall reduction in state employment. Moore correctly points out those cuts amounted to the largest single reduction in the state budget in 16 years. And then there is the matter of recent federal budget cuts under President Donald Trump, including Medicaid, that further hurt state government finances.
This much is certain. Expect to hear more bickering among Democrats and Republicans over which party is the more fiscally responsible, the one that opposed upgrades to public education or the one that approved the Blueprint without a clear plan on how to pay for it. That is, more or less, what any dispute over state finances inevitably comes down to — nobody wants to admit to shortchanging students or to spending more than is necessary no matter how worthy the cause.
Or, to put it another way, do we tolerate budget deficits or deficits in the classroom? Even that may be an oversimplification but perhaps not by much.
Baltimore Sun editorial writers offer opinions and analysis on news and issues relevant to readers. They operate separately from the newsroom.