Maryland state employees to see 4.5% wage increase resulting from larger-than-expected budget surplus

Maryland state employees will receive a 4.5% wage increase beginning Nov. 1 as a result of a second year of a projected multibillion dollar revenue surplus.

The cost-of-living increase fulfills Gov. Larry Hogan’s pledge to devote some of the $2 billion revenue surplus from fiscal year 2022 to state employees.


“This cost of living adjustment will help state employees and their families with the challenges they face from historic inflation, and — amid the post-pandemic labor shortage — today’s actions advance our enhanced efforts to recruit and retain a talented workforce,” Hogan said in a statement Thursday.

AFSCME Council 3 President Patrick Moran gave the bulk of the credit to leadership in Maryland’s House and Senate and the advocacy of his members. AFSCME is a union that represents state, county and municipal employees. Maryland’s chapter has approximately 30,000 members.


“This wage increase is a reflection of what happens when we join together to demand what we deserve, and this is just a first step to continue to fight for better pay and respect,” Moran said in a statement.

Maryland’s Board of Revenue Estimates, comprised of Comptroller Peter V.R. Franchot, State Treasurer Dereck Davis and Department of Budget and Management Secretary David Brinkley, met Thursday afternoon, voting to boost Maryland’s fiscal year 2023 revenue projections by $1.2 billion, bringing the total to $23.7 billion.

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The board also voted on the first projected revenue forecast for fiscal year 2024, landing at $25.3 billion.

The surplus comes as Marylanders are about to elect a new governor, attorney general and comptroller, and all of the seats in the General Assembly are up for grabs Nov. 8, a week after the raises begin.

Though he celebrated the surplus, Franchot warned Marylanders that “the party is over,” declaring the “past few years of jaw-dropping revenue surpluses are firmly in the rearview mirror.”

Franchot credited the surpluses to federal assistance the state received as a result of the COVID-19 pandemic, an influx in sales tax collections from consumer spending and responsible fiscal decisions made by the board, leadership in the General Assembly and Hogan.

“Make no mistake — today’s report was good news overall for the state’s bottom line and underscores the strong bones of our state’s economy as well as our ability to weather tough times,” he said.

But Franchot cautioned that a pending economic downturn and climbing interest rates will cause tax revenue streams to decrease.


“That’s why these numbers should not be taken as a sign of good times rolling on into the future,” Franchot warned.