Gov. Wes Moore is touting his “fiscal responsibility” along with a balanced budget proposal, which some lawmakers and economists say ignores Maryland’s most pressing issue ahead: billions of dollars in structural debt.

Moore has boasted that his administration balanced the budget this year without new taxes or fees — a reality possible in large part by a series of tax and fee hikes last year.

Meanwhile, the Maryland Department of Legislative Services projects a nearly $3 billion structural deficit in fiscal year 2028, growing to roughly $4 billion by fiscal year 2030. State lawmakers will likely have to make cuts, raise taxes or both next year.

Dr. Daraius Irani, the vice president of business and public engagement at Towson University, said Maryland leaders are running behind on long-term budget solutions and should get ahead of the issue this legislative session.

“Four years ago really would have been the time to really … look into some of the efficiencies,” he told Spotlight on Maryland. “They ignored some of these structural deficits.”

Irani said state leaders need to pursue structural reforms instead of short-term budget patches.

“The Maryland State Government really needs to look at sort of what it does, what its mission is. One of the challenges that it faces is its revenues aren’t growing as fast as expenditures,” he said. “Collectively, we really have done a poor job of managing Maryland’s finances writ large I really think that Maryland needs to use this crisis to focus.”

Will taxes go up next year?

Del. Matt Morgan, R-St. Mary’s County, said Maryland Democrats prioritized avoiding tax increases in an election year. He said Marylanders should not be surprised if their elected officials raise taxes next year to counter the increasing deficit.

“They’re kicking the can down the road, and they’ve been kicking the can down this entire term,” Morgan told Spotlight on Maryland. “This is an election budget. No one’s told us what we’re going to do next year.”

Maryland leaders raised a series of taxes and fees last year to address the state’s deficit, including a new tax on IT and data services, tax hikes on high-income earners, and increased tax rates on vehicles, cannabis and sports betting.

Two key factors in the deficit spike next year include scheduled spending increases for Medicaid and the Blueprint education plan. Morgan said his colleagues may have no choice but to reassess these programs and restructure the state government.

“You can make the necessary cuts in the hard choices. Unfortunately, that is probably revolving around the Blueprint front and around the Medicaid expansion,” Morgan told Spotlight on Maryland. “I think when you look down deep inside the budget, you’re finding a lot of programs that are duplicated. You could get rid of a lot of expansion in government.”

Spotlight on Maryland asked Moore’s office what his plan is to address the state’s structural deficits, and whether he would commit to no new taxes and fees in a potential second term. The office did not make that commitment.

His spokeswoman emailed the following statement: “Governor Moore inherited a structural deficit after years of Maryland’s spending outpacing its revenue.Despite that, he has balanced the budget each year in office while focusing on growing Maryland’s economy. Since Day One, he’s been clear that Maryland must break our economy’s dependence on Washington to address the state’s long-standing fiscal issues. That’s why the Governor has been so diligent about growing our state’s private sector and has ushered in major job-creating economic investments from companies like AstraZeneca, Samsung Biologics, and Sphere Entertainment Co. While we appreciate the sentiment about him earning a second term, right now, his focus is passing yet another responsible, balanced budget.”

Doug Mayer, who previously worked as a spokesman for then-Maryland Gov. Larry Hogan, said that Moore has no one to blame for the structural deficit but his political allies. Mayer emphasized that Hogan vetoed the $30 billion Blueprint education plan over budget concerns and wanted to restructure state government to save money in the long term. Both efforts, he said, were shut down by the Democratic supermajority in the legislature.

“Moore is a political coward,” Mayer told Spotlight on Maryland. “The budget situation is never going to get better. They’re just going to raise taxes. They won’t do it this year because they’re playing games.”

Another factor in Maryland’s fiscal woes is the loss of revenue from residents leaving for other states. A report last year from the Maryland Comptroller found that from 2022 to 2024, Maryland ranked among the top 10 in the nation for the largest net loss of residents to domestic migration. This included an increase in the number of young adults fleeing amid concerns about housing costs.

‘Next year is very concerning’

Senate Minority Leader Steve Hershey said Moore’s proposed budget does not address future deficits. He said state leaders need to lead with urgency and prove that Maryland is affordable for residents and fruitful for businesses.

“Next year is very concerning and should be concerning for Marylanders,” Hershey told Spotlight on Maryland. “We would like to send market signals out to businesses to tell them that we have a way to address these deficits, that we’re going to scale back the Blueprint, that we’re not going to have to raise taxes. Because as we saw last year, they raised taxes on businesses, and businesses are making decisions every day on whether to stay in Maryland, whether to expand in Maryland, or maybe even come to Maryland. And they need to know what this legislature is looking at with respect to how the budget is going to be here for the next couple of years.”

Spotlight on Maryland sent the following questions to Sen. Guy Guzzone, D-Howard County, chair of the Budget and Taxation Committee; and Del. Ben Barnes, D-Anne Arundel and Prince George’s counties, chair of the Appropriations Committee.

How do you plan to address Maryland’s pending structural deficits?

Are you committed to avoiding any new taxes or fees?

Guzzone and Barnes did not respond.

Spotlight on Maryland is a joint venture by The Baltimore Sun, FOX45 News and WJLA in Washington, D.C. Have a news tip? Call 410-467-4670 or email SpotlightOnMaryland@sbgtv.com. Contact Patrick Hauf at pjhauf@sbgtv.com and @PatrickHauf on X.