Gov. Hogan, Maryland budget officials offer Gov.-elect Moore words of caution for his first budget amid tough economy

As the United States navigates uncertain economic waters, Gov. Larry Hogan, Comptroller Peter Franchot and other Maryland officials on Thursday urged Democratic Gov.-elect Wes Moore and other newcomers to the executive and legislative branches to budget with caution.

Moore, an author and former nonprofit CEO who has never held public office, is required to submit his budget for the Maryland 2024 fiscal year to the General Assembly on Jan. 20 — a mere two days after he is inaugurated.


The General Assembly, in partnership with the governor, is constitutionally required to pass the state budget during its 90-day legislative session, now set to end in mid-April. Hogan, as the departing governor, kicks off the process by proposing a spending plan that the incoming Moore administration can change as it likes.

Hogan held a news conference Thursday morning in Annapolis to offer a glimpse of what he’s proposing that included a lengthy list of budget recommendations, including: allotting $100 million for a new University of Maryland Medical System facility in Easton; $100 million to the Sheppard Pratt private mental health care system to expand its new Elkridge campus and establish a new children’s hospital in Towson; $70 million for rental housing and homeownership programs; and $5 million toward state and local efforts to address rising rates of antisemitism and other hate crimes.


The Republican governor also proposed that the incoming administration provide more money for his “re-fund the police” recruitment, retention and training initiative, continue to fully finance efforts to restore the Chesapeake Bay, and maintain the state’s surplus and sizable rainy day fund, now approximately $2.9 billion.

Hogan contrasted the state’s flush financial status with the deficit he inherited from Democratic Gov. Martin O’Malley, something Hogan credited as his impetus to run for governor.

“We are leaving a long-term budget surplus at a record $5.5 billion in reserves,” Hogan said Thursday. “The state is now prepared for any future challenges or economic downturns.”

Like many other states, Maryland received substantial funding from the federal government during the COVID-19 pandemic.

During the 2023 legislative session, the General Assembly will gain the ability to shift money within the governor’s proposed operating budget, provided it remains balanced and the changes don’t exceed the governor’s preset limits, giving lawmakers unprecedented oversight in the budget process.

Hogan said it would be “a mistake” for the legislature to “recklessly spend down the surplus” and undermine Maryland’s “strong fiscal position.”

In a statement, Senate President Bill Ferguson, a Democrat, said that the legislature knows how to be “pragmatic” and “spend responsibly while balancing our state’s most essential needs.”

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“In 2023, the Senate’s priority is to build on the momentum of the last term as we continue to move the state forward in a fiscally responsible way,” he said.


The Maryland Board of Revenue Estimates also met Thursday in Annapolis, voting to increase state revenue projections for the 2023 fiscal year by $55.8 million to $23.74 billion.

However, state revenue projections for 2024 were lowered to $25.1 billion from September’s forecast — a decrease of $166.8 million — due to a decrease in capital gains income and stagnant projections in withholding, sales and use, and corporate income taxes.

The board also pointed to the end of federal pandemic-related assistance as a major factor in the projected decrease for fiscal year 2024.

State Treasurer Dereck Davis told fellow board members that Maryland may see a “Fed-induced recession” in the near future, referring to the central bank’s strategy of raising interest rates in an attempt to cool inflation.

Franchot urged Maryland’s new leaders to pay close attention to the sobering revenue estimates.

“It’s a stark reminder,” Franchot said, “that the days of counting on federal stimulus money have come and gone, and we’re going to have some kind of economic slowdown … [pulling] us all further away from the prosperity we’ve had these past few years.”