For the second straight year, Maryland legislators are arriving in Annapolis with a budget shortfall of more than $1 billion.
In the eyes of the GOP, the minority party in both House and Senate, the deficit presents a new opportunity to hone a small-government message.
“Government has out-sized itself,” said Senate Minority Leader Steve Hershey (R- Upper Shore). “We’ve gotten to the point where there’s more government than people need.”
Because Democrats hold commanding majorities in each chamber, and a Democrat sits in the governor’s mansion, Hershey acknowledges that his party’s role will be a “responsive” one.
“We are going to take a good look at the type of legislation that comes in from the majority party and see the issues that they think are important,” Hershey said. “Because we know what’s important to Marylanders, and that’s the affordability, energy and accountability of government.”
To resolve last year’s budget woes — to the tune of $3.3 billion — lawmakers enacted a combination of budget cuts and tax and fee increases. Then came Gov. Wes Moore’s (D) announcement of a buyout offer for state workers and government-wide hiring freeze.
But the arrangement didn’t provide a lasting fix. In November, state officials told lawmakers that they were projecting a roughly $1.5 billion deficit for the 2027 fiscal year — five times more than what was predicted at the end of the last legislative session.
And from there, matters may only get worse, said state officials, who noted that pressures such as inflation, Medicaid costs and the consequences of tariffs were all to blame for the worsening deficit picture.
“When we talk about the budget this year … It’s about the $3 billion deficit next year and a $3.5 [billion deficit] the following year,” Hershey said. “We want to address not just the structure, but the symptoms. Why are we getting to that point?”
Ask Republican leadership, and the medicine might be paring back state spending, including on the Blueprint for Maryland’s Future, a costly “unfunded mandate” for the state’s education system, in Hershey’s words.
House Minority Leader Jason Buckel (R-Allegany) said that the Blueprint money is well-intentioned, and some elements are worth keeping, but “we just can’t afford it.”
“Spending money is not necessarily the immediate pathway towards success in education,” Buckel said. “You also have to be fiscally responsible to your taxpayers. You can’t just simply say the answer is always more.”
On Thursday, Moore announced a $10.2 billion allocation for education in his proposed budget, a $373.8 million increase over the previous fiscal year. His proposal includes $480.5 million for school construction.
“Maryland has the talent and the drive to have the best schools in the country, but that requires more than just high standards — it requires us to continue making historic investments,” Moore said in a statement.
Buckel said that the legislature should halt raises for some state employees, while ensuring that law enforcement and mental health services are properly staffed and funded.
“We have to hire more people in corrections, public safety and the sort of mental health professions, because if you let those things go, it has deleterious effect on all of your society,” he said. “We have to restrain the growth in state employment. We have tremendous state employees — I think they have been the recipient of quite a bit of raises over the last four or five years.”
During an election year, legislators on both sides of the aisle seem intent on avoiding tax increases, and focusing on pocketbook issues, though with vastly different approaches.
Energy bills, for instance, are once again likely to draw significant debate. And while many Maryland Democrats have put blame onto regional grid operator PJM — arguing that it failed to plan for massive surges in demands primarily caused by data centers — Republicans have argued that the state’s climate mandates have made matters worse.
By law, the state must reduce its carbon emissions 60% below 2006 levels by 2031. Moore has also previously touted his goal for the state to rely entirely on clean energy by 2035.
Hershey argues that observers need not look any further than the recent ballooning of the Strategic Energy Investment Fund. Fueled by utilities, that can make alternative compliance payments in lieu of purchasing renewable energy, the fund has grown exponentially in recent years. The General Assembly tapped into the fund, which pays for energy efficiency and renewable energy programs, last year to provide ratepayers with an $80 refund on their utility bills, and to help balance the budget.
“Generators can’t get enough renewable energy. Our goals are too high,” Hershey said. “As soon as Gov. Moore takes overpayments from electric bills and puts it into the general fund, that’s a tax.”
This General Assembly session is also likely to feature sparring between Constellation — which already owns several power plants in the state and has proposed a new natural gas plant — and Exelon, its former parent company that by law can’t build and operate generation, but wants to.
Hershey, for one, is open to the idea of allowing Exelon to build generating plants, though with guardrails. Constellation is a private company, meaning its power plant would be funded by investors, whereas Exelon can use ratepayer funds.
“There’s a way to take a look at it,” Hershey said of Exelon’s proposal. “It’d be very specific on making sure that this is not rate-based, and at the same time making sure that customers aren’t paying for anything until electrons are being generated.”
Amid President Donald Trump’s (R) widespread immigration crackdown — which doubled the number of arrests by immigration enforcement in Maryland last year — the issue is also likely to feature prominently in this year’s legislative session.
In some Maryland counties, the sheriff’s departments enter into agreements with Immigration and Customs Enforcement to let deputies take on certain immigration enforcement abilities. In Maryland, those partnerships, called 287(g) agreements, are largely restricted to the jail-based model of the agreement, where jails can execute administrative immigration warrants on people already in their custody.
Lawmakers are expected to take up legislation in the 2026 session that would ban such agreements, after Democrats’ unsuccessful attempt to do so last legislative session.
Buckel calls the effort is performative “virtue signaling.”
“If you’ve taken the right to be here unlawfully – and I understand that — I couldn’t imagine growing up in Ecuador and wanting a better life and you can’t get into the United States. I might take that chance too,” Buckel said during a December interview. “But if you came in illegally and did the best you can, and then it turns out you’re a member of MS-13 and you’re dealing drugs and you get thrown in the Montgomery County jail, I don’t understand why we wouldn’t allow the law enforcement officials for those individuals to work with the federal government.”
Hershey, who argued that Maryland should “let the feds continue to do their job,” with regard to immigration, said he believes that 80% of Marylanders wouldn’t list immigration issues as their biggest concern — even though Democrats will focus on it closely.
“This will be just used to take the focus off what the real important issues are — and that’s whether or not the Democrats are going to raise taxes this year,” Hershey said.
