Maryland Begins New Budget Year With Much Still to Be Determined

The new state budget takes effect July 1 with a number of important details as yet still undecided – leaving local governments and others who rely on the state for various forms of support wondering what the impact on them will be.

Usually, by the start of a new fiscal year the budget is firmly in place; where spending is increased or reduced is widely known and those affected by it can plan accordingly. But this year, one of the most important budget decisions is still vague. Governor Hogan has ordered a 2 percent across-the-board cut to state agencies, but he and his agency heads have offered very few details of how these cuts will be implemented. Consequently Marylanders cannot yet evaluate the impact on schools, transportation, public safety, health care, or anything else. The administration has promised only that the legislature will receive details at some point.

Another major concern as the new budget takes effect are cuts in support for Maryland’s public schools. The Governor cut $68.1 million from what is known as the Geographic Cost Education Index, which gives additional assistance to school districts where costs are particularly high. The legislature had included that money in the budget it passed. This cut will be felt in 13 counties whose schools serve about 80% of the state’s students.

Baltimore City, Montgomery County, and Prince George’s County are especially hard hit by these cuts. For example, Prince George’s County lost over $20 million for the budget year that starts July 1, putting 944 teacher and staff positions at risk of termination. Layoffs in other school districts have already commenced.

The legislature has required the Department of Budget and Management to report the details of the 2 percent cuts not later than September 1. However, the uncertainty that marks the state’s new budget year underscores the need for reform in the state budget process.