News

Legislative Update

The 447th Maryland Legislative Session begins on January 8th with Governor Moore and state lawmakers facing a structural budget gap that legislative analysts say is on track to become one of the worst financial situations in two decades. Essentially, there is a growing gap between the state’s ongoing spending commitments the state has made and ongoing revenues. How Governor Moore and lawmakers plan to address the budget problem remains unclear, but some combination of budget reductions, changes to the state’s Blueprint for Maryland’s Future education commitment, use of the state’s Rainy Day Fund cash reserve, and revenue increases are all likely. While increases to personal income taxes or an increase to the sales tax rate have not been ruled out, more modest revenue measures are anticipated.

The Maryland Transportation Trust fund is facing significant shortfalls as well, with the Moore Administration proposing to reduce $1.6 billion from its six-year capital program compared to the previous year’s plan. Despite increases to registration fees and new revenues such as a 75-cent per-ride fee on Uber, Lyft, or similar services, more work to raise transportation revenue is expected during session.

There is some concern in Annapolis that federal election results could impact the state budget situation as well. Federal funding for transportation projects such as the reconstruction of the Francis Scott Key Bridge and Baltimore Red Line rail system could be at risk. The relocation of the FBI headquarters to Prince George’s County is another major project mentioned as being less likely under the Trump Administration.

Some changes to the state’s Preferred Provider Program could be on the table for 2025 as the Moore Administration and the legislature continue to evaluate the work and mission of Maryland Correctional Enterprises (MCE). After many of years of legislation targeting MCE and its business practices, a workgroup report requested by legislative leaders is expected prior to the start of session. Recommendations are expected to address wages, inmate training, and the competitive advantage to MCE over potential small and minority business competitors.

The Moore Administration has also been working throughout this year to develop an Executive Order broadly addressing the state’s procurement system. Recommendations impacting the Preferred Provider Program are anticipated, and the order is expected to be released prior to the start of session. Along with our government affairs consultant, we have maintained open lines of communication with officials from both the Moore Administration and specifically the Department of General Services and are hopeful for recommendations to improve the efficiency and effectiveness of the program.

Source: Manis Canning & Associates