Tue. Jul 16th, 2024

Governor Moore’s Proposed Budget Cuts: What Marylanders Need to Know

By meerna Jul11,2024
Governor Moore’s Proposed Budget Cuts: What Marylanders Need to Know

Maryland Gov. Wes Moore proposed nearly $150 million in budget cuts Wednesday aimed at shifting funds to key health care and child care programs his administration sees as crucial to boosting the state’s economy.

The Moore-Miller administration will submit a budget-cutting proposal to the state spending board for final approval next week.

In the meantime, here’s what Marylanders need to know about the announcement.

What did the governor change?

The Moore-Miller administration has proposed saving nearly $150 million by making targeted cuts to the state budget. The move will require many state agencies to tighten their financial belts in one way or another. That could mean less money for a government program or holding off on hiring until later in the year.

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Under the plan, the comptroller’s office is losing $1.1 million that could have been used to hire staff earlier in the fiscal year. The Maryland Department of Health has struggled with hiring delays and program cuts totaling more than $26 million.

Why does the state have to make these cuts?

Since the pandemic ended, Medicaid recipients have had to re-prove their eligibility for federal and state health subsidies. It has been difficult for states to predict how many people will prove they can stay on Medicaid, but the number of people eligible has been higher than the state’s initial estimates. As of May 31, 1.68 million Marylanders received Medicaid, according to the health department.

There has also been a sharp increase in demand for childcare subsidies through the state Childcare Grant Program as more parents returned to work.

When Moore took office in January 2023, there were about 24,000 children enrolled. By the end of 2023, that number had risen to 33,000, and Moore administration officials had budgeted — and put enough money in the current budget — for 40,000 children. And they’ve already reached that number.

How will this impact Medicaid and child care assistance?

The $150 million in savings from the cuts will be set aside and eventually allocated to two programs. While the cuts can legally be made now, they can’t be transferred to other programs until January, when the General Assembly returns to session and lawmakers fully reopen the budget books.

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Will this help solve the country’s long-term budget deficit?

No. This action reallocates just $150 million, a tiny fraction of the $63 billion annual budget. The state budget is projected to be unbalanced in future years because revenues are flat but the needs of government programs are growing, especially in public education.

Without action, the gap would grow to $3 billion by 2028, but that won’t happen because the budget must be balanced every year. Both Democratic and Republican officials have acknowledged they will have to have a serious conversation about how to fix the long-term budget gap.

Why is this happening now? Didn’t lawmakers just finish the budget?

Moore may be trying to set the tone for discussion ahead of next year’s budget debate.

Tuesday’s announcement focused on cutting spending to maintain essential services, and in an editorial, Moore wrote that the state must make “difficult decisions about how we spend what we have.”

House and Senate lawmakers disagreed earlier this year on whether to begin closing the projected multiyear budget gap with spending cuts or additional taxes, fees and revenues. After heated debate, they settled on a balanced budget but added some tax and fee increases, which Moore signed.

State finance law allows the chief executive to review and reduce spending on certain programs, provided it does not result in a reduction of more than 25%.

By meerna

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