The Maryland Board of Public Works on Oct. 22, 2025, approved the elimination of 502 state government positions to address ongoing fiscal shortfalls driven by federal policy changes. The unanimous vote by the three-member board — comprising Gov. Wes Moore, Comptroller Brooke E. Lierman and Treasurer Dereck E. Davis — targeted 332 roles through a voluntary buyout program and 170 vacant slots, marking a key step in a broader $121 million spending reduction for fiscal year 2026.
The action responds to a projected $1.1 billion budget gap for the year that began July 1, 2025, following a $520 million surplus in fiscal year 2025. Officials attribute much of the strain to federal spending cuts enacted through the One Big Beautiful Bill Act, signed into law on July 4, 2025, which reduced funding for programs like Medicaid and environmental initiatives. These reductions, combined with a partial federal government shutdown starting in early October, have delayed reimbursements to states for extended services, exacerbating revenue volatility. The shutdown, now in its second week, has left Maryland uncertain about recovering costs for administering federal benefits, a process that historically relied on post-crisis repayments.
Under the Voluntary Separation Program, launched in July 2025, eligible employees with at least five years of service could apply for early exit incentives. The program received 877 applications, but approvals were limited to 332 to align with agency needs and fiscal targets. Participants receive a $20,000 lump-sum payment, $300 for each year of service, compensation for unused annual and sick leave, and six months of health insurance continuation. In exchange, they agree to a one-year ban on reemployment with the state, preventing short-term rehiring that could undermine savings.
The eliminations are expected to yield $10.5 million in general fund savings for fiscal year 2026, escalating to $22 million annually from fiscal year 2027. These figures form part of layered cost controls, including a hiring freeze in executive branch agencies, deferred non-essential maintenance and streamlined procurement processes. The Department of Budget and Management oversees implementation, reviewing positions across departments such as transportation, health services and natural resources to minimize disruptions to public-facing operations.
Gov. Moore, speaking at the board’s routine monthly meeting in Annapolis, described the measures as necessary amid unprecedented federal-state tensions. “Maryland has never been tested like this before, where we now are seeing that the relationship between the federal government and our states, it’s not just that it’s been altered, in many cases, it’s been severed,” he said. He linked the pressures to national policies inflating costs and curtailing supports during what he termed a historic crisis. “We have an administration that just continues to attack our economy and our people and we have policies coming from the White House that are doing everything from raising prices, to pulling away basic supports and basic services.”
Moore stressed the administration’s commitment to fiscal stewardship after inheriting and resolving a prior deficit. “While we are proud that we were able to turn an inherited deficit into a surplus, it also means that we have to work on balancing the budget, rein in spending, increase our top line, and do it without sacrificing essential services that our people rely on,” he added. On the cuts’ gravity, he noted: “All the easy decisions are gone. All the easy decisions are off the table.” He assured attendees: “None of these choices is easy. I do want to ensure the public, including all of our public servants, that we will continue to protect our people.”
The Board of Public Works, established under the Maryland Constitution in 1838, serves as the state’s central contracting and spending authority, overseeing leases, grants and personnel actions exceeding certain thresholds. For workforce reductions involving more than 100 positions, state law under the Personnel and Pensions Article requires its approval, ensuring legislative oversight through public proceedings. Unions representing about 20,000 state workers, including the American Federation of State, County and Municipal Employees, have monitored the process without filing formal challenges to date.
Republican lawmakers offered measured responses. Senate Minority Leader Steve Hershey, R-Upper Shore, issued a July statement acknowledging the shift toward restraint but forecasting future burdens. “Governor Moore is finally recognizing that the Republicans have better ideas when it comes to fiscal responsibility,” Hershey said. He cautioned: “Wait until next year Marylanders have not seen the last of Governor Moore’s appetite for higher taxes and increased fees.”
A separate complication arose with the buyout disbursements. On Oct. 20, 2025, the Department of Budget and Management detected a software file error that doubled payments to 293 participants during routine payroll processing. Affected individuals received $40,000 lump sums instead of $20,000, along with duplicate service-year bonuses. Mid-process alterations risked broader payroll disruptions, so officials proceeded with issuances while issuing alerts.
Notifications via email and phone instructed recipients to refrain from spending excess funds. One message read: “Please retain these funds. The entire amount (correct payment and overpayment) you received will be automatically debited from your account within the next 2 weeks. A new, correct payment will be transmitted to you on November 19th. Apologies for the inconvenience this may cause.” Debits commenced this week, with full corrections due by mid-November.
An anonymous affected worker expressed dismay to reporters, highlighting procedural concerns. “It’s sad for our government. It’s sad for our state. It’s sad for the employees,” she said. She contested the automated recovery: “I’m not giving them permission to go to my account and take out money. Yes, I know it’s not my money, but let’s talk about it. Don’t just send me an email and say, ‘Don’t touch any of that money. We’re taking it back sometime in two weeks when we decide.'” The handling left her “alarmed, scared, frustrated,” she added, underscoring eroded trust. “I didn’t go to you and say, ‘Hey, buy me out to fix your deficit.’ You offered that to me. We’re publicizing that we want to help federal employees with employment. Well, you’re not paying the employees who have dedicated themselves to you already.”
Senior Advisor David Turner addressed the mishap in a statement. “On October 20, the Department of Budget and Management discovered a file error that resulted in double payments to 293 VSP participants,” he wrote. “As the electronic payment process for all state employees was already in progress, there would have been considerable risk in modifying the payment file. Therefore, the state paid all state employees on schedule — providing notice to VSP participants that, due to a software error, the funds they received will be recalled and the correct amount reissued.” For unresolved overpayments, options include deducting from leave balances, collections or tax refund offsets.
These events unfold against Maryland’s fiscal framework, detailed in the Department of Legislative Services’ June 2025 briefing, which highlighted reliance on volatile revenues like capital gains amid suspended safeguards. The fiscal year 2026 operating budget, enacted at $62.5 billion in April, deferred capital projects to buffer uncertainties. Quarterly revenue forecasts through December will track federal aid, potentially prompting further adjustments like contract reviews if gaps widen. The administration has ruled out broad tax hikes for now, focusing instead on efficiencies to sustain services in education, public safety and health.
