The Looming State Deficit Expected To Be The Big Topic During the 2025 Md. General Assembly

Senate President Ferguson says he shortfall is entitlement spending above projections.Md. Senate President Bill FergusonAnnapolis, Md (KM) Maryland legislators agree that the biggest issue they’ll be facing during the 2025 General Assembly Session will be the budget deficit. The state is expected to face a  $2.9-billion funding shortfall in the next fiscal year. “We’re going to have to look at revenues in certain areas because when we look at the budget overall, the gap cannot be accomplished with cuts alone,” says Maryland Senate President Bill Ferguson, who spoke to reporters last week in Annapolis.Some legislators say the driving force behind this deficit is the “Blueprint for Maryland’s Future,” the massive educational reform plan, and some have proposed pushing some of the goals of the plan a few more years into the future. But Ferguson says the Blueprint is fully funded through fiscal year 2027. “Even if we make adjustments that yield some cost savings, that would not be realized until FY 28 at the earliest,” he said. “Any changes to education will not impact the general budget deficit that we have.””The vast majority of the deficit comes from entitlement spending that is above projections,” Ferguson continues. “These are programs like Medicaid, the Child Care Subsidy Program, and we recently learned the Development Disabilities Administration which had higher billing than anticipated.”Another program cited by Ferguson was  Inmate Medical Care which came in at a higher amount than previously anticipated. “When we think about where the dollar challenges come from, it is from entitlement being above projections. It is not because of inappropriate spending in any way,”: he says.Despite the situation with entitlement programs, Ferguson says extreme actions will not be taken to close the deficit. “We are not going to throw 50,000 people off of Medicaid. We are not going to throw 20,000 families out on the street to not have Child Care Subsidy Credits. So we have to find another way to cut from other places, to prioritize,” he says.Governor Wes Moore has said everything is on the table when it comes to the budget. He’s expected to introduce his spending plan for fiscal year 2026 on January 12th, 2025.In addition to the budget deficit, Senator Ferguson says Maryland could be facing some challenges when the Trump Administration takes office. President-elect Trump has said he wants authority to fire a number of government employees and  transfer federal agencies outside of the Washington DC area. “We are a state that has benefited by being in close proximity to Washington that is highly educated, highly compensated individuals who are helping to run our nation,” Ferguson  said.But relocating these agencies and firing federal employees could negatively impact Maryland’s economy. “If there is a cough in the federal government, if there is slight cut in what is perceived for a federal government, that is pneumonia or a crisis for Maryland. That is the uncertainty that we are trying to hope to navigate. We just don’t know what the actual impact will be. And I think we won’t know until the first 60 days of the next administration,” he says.The 2025 Maryland General Assembly begins its 90-day session on January 8th.By Kevin McManus