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To Make the Most of Maryland’s 2020 Budget Reform, Focus on Transparency, Inclusion, and Prudence

Thanks to a voter-passed 2020 amendment to the Maryland Constitution, lawmakers in 2023 will have a more meaningful say in the state’s budget than they have in more than 100 years. The new, more balanced process puts Maryland in line with the vast majority of other states and opens the door to more meaningful public participation in conversations about how to use our shared resources. The reform also removes a harmful bias in the current budget process that favors austerity over public investment.

To make the most of this opportunity, lawmakers should take several steps to make Maryland’s budget process as transparent, inclusive, and prudent as possible. Some of these recommendations concern legislative budget considerations, while others apply to other parts of the budget process. Some steps policymakers can take right away, while others may require legislation.

Improving Transparency

  • Like most states, Maryland produces a baseline budget before each legislative session to project the cost of maintaining current services amid the coming year’s expected demographic and economic changes. Policymakers should refine the baseline estimate and include it in more budget publications to clarify how policy choices affect spending levels.
  • Most budget publications report spending levels by agency, while a minority report spending by budget function. In principle, a functional budget breakdown can help the general public better understand spending choices. Policymakers should revisit the current breakdown of budget functions to ensure they clearly communicate the purposes state investments serve. With such an improved functional breakdown, the state should release more digestible budget publications to enhance understanding among the general public. These publications should include actual, proposed, and baseline budget data.
  • The governor and executive branch agencies spend months formulating the upcoming year’s budget proposal before the legislative session. Currently, this process is almost entirely opaque to lawmakers and the public. The executive branch should increase transparency in budget development through hearings and publications. These should be designed to inform both the legislature and the general public.
  • The Department of Legislative Services annually analyzes each state agency budget to identify important trends and issues. DLS should expand these analyses to include equity impacts of budget choices along lines of race and ethnicity, gender including gender identity, disability, and income.
  • The state spends millions each year on economic development subsidies with little evidence of success. Because these subsidies are submerged in the tax code, they do not all receive scrutiny during the annual budget process. Lawmakers should require that these subsidies spend only funds appropriated in the budget.

Strengthening Inclusion

  • Currently, the only built-in opportunity for public input on the state budget is each state agency’s budget hearing. While the 2020 reform will make this opportunity more meaningful, it still gives Marylanders too little chance to weigh in. Lawmakers should increase opportunities for public input, such as local listening sessions before and during the legislative session or a second round of hearings after the introducing chamber has considered the budget. Members of the public should also have an opportunity to weigh in during budget development hearings hosted by the executive branch.
  • Lawmakers should remove barriers to participation in hearings and other budget-related events. Most importantly, Marylanders should be able to participate remotely in all events, including those held on-site in Annapolis. Even before the pandemic, requiring in-person testimony closed the door to people who must work in the afternoon, have limited transportation options, or live in more remote corners of the state. Secondly, lawmakers should conduct robust outreach to maximize awareness of these events and interest in them. Increasing opportunities for public comment will likely require lawmakers to devote more time to budget hearings and related events.
  • We should strengthen inclusion within the General Assembly so that all Marylanders know their representatives in Annapolis have a voice. Steps to accomplish this include expanding the number of voting members of the conference committee for the budget bill and strengthening the norm that on the floor and in committee, members are expected to vote based on their values and their constituents’ interests. This may require changes to institutional culture in addition to formal policy.

Budgeting with Prudence

  • Maryland’s unbalanced budget process has created many side effects, including a larger number of mandated appropriations in Maryland than in other states. There will be less need to create new mandates in the future, as lawmakers will have a greater say in the annual budget process. However, lawmakers should not hastily eliminate existing mandates. Lawmakers created these requirements to protect essential services like education and health care. They should now consider each on its own merits, with no predetermined intention to erase them.
  • The constitutional amendment does not allow lawmakers to increase the total executive branch appropriation above its level in the governor’s budget. This could create a temptation to fight for crumbs, cutting one priority to fund another. The fact is, Marylanders have unmet needs across a wide range of policy domains. The best protection against this temptation is a stable, effective revenue system strong enough to meet our state’s needs.
  • To be sure, not every dollar in Maryland’s budget is spent wisely, most notably our approximately $1 billion in annual spending on prisons. The best way to reduce the cost of mass incarceration over time is through policies that prioritize more cost-effective community services, release Marylanders from prison, or do not send them there in the first place. Budget cuts not matched by equitable policy change could worsen conditions and thereby do more harm than good.
  • Some of these recommendations may require additional resources to implement. The General Assembly should appropriate the funding needed to implement them effectively.