(ANNAPOLIS – February 1, 2025) – In January 2026, Governor Wes Moore unveiled a $70.8 billion budget for Fiscal Year 2027 that closes a $1.5 billion hole without asking Marylanders to pay more in taxes. The proposal represents a dramatic turn toward fiscal restraint after two years of aggressive spending and tax increases.
How He’s Balancing the Books
Moore’s team is using a combination of real cuts and financial maneuvering:
- $900 million in direct spending cuts across state agencies and programs
- $1.8 billion in total savings when accounting for fund transfers and shifting costs to counties
- 8% Rainy Day Fund balance maintained to meet statutory requirements
- Zero new taxes or fees—a stark contrast to his FY 2026 budget which raised $1.6 billion in new revenue
Where the Money Goes
Despite the belt-tightening, Moore is protecting—and even growing—funding in key areas:
Education Wins Big A record $10.2 billion for K-12 schools, marking a 17% increase since Moore took office. This includes hundreds of millions for school construction and community schools.
Public Safety Gets a Boost $124 million in state aid for local police departments—the highest funding level in state history.
Economic Development Takes Center Stage Moore is betting on Maryland’s future with targeted investments:
- ~$100 million in business tax cuts focused on research & development, small business expensing, and interest deductions
- $54 million for quantum computing industry infrastructure
- $13.5 million for the Sphere at National Harbor—expected to create 4,750 jobs
- Millions more for life sciences, clean energy, and aerospace development
Communities Get Support $73.7 million for 252 revitalization projects, with two-thirds directed to “Just Communities”—neighborhoods prioritized for equitable investment.
Who Takes the Hit
The budget cuts deep in several areas:
- Developmental disabilities services: $150 million reduction
- State workers: $120 million saved by canceling planned pay raises and eliminating 207 positions
- Healthcare and social service providers: $79 million in savings by freezing rate increases
- General government operations: $154 million in expense reductions
- Local governments: Counties must absorb $39 million in teacher and librarian retirement costs
Moore is also using accounting moves to bridge the gap, including pulling $292 million from the Strategic Energy Investment Fund and $145 million from reserve accounts.
The DECADE Act: Moore’s Economic Vision
The centerpiece of Moore’s growth strategy is the Delivering Economic Competitiveness and Advancing Development Efforts (DECADE) Act of 2026, which:
- Shifts Maryland’s economy away from dependence on “eds, feds, and meds” (education, federal government, and healthcare)
- Focuses state incentives on “lighthouse industries”: quantum computing, biotechnology, cybersecurity, and aerospace
- Eliminates underperforming economic development programs
- Streamlines how the state attracts and supports businesses
- Extends key tax credits through the early 2030s
The Reality Check
While Moore has eliminated the immediate deficit, state budget analysts warn this is a short-term fix. The budget relies heavily on one-time fund transfers and doesn’t address Maryland’s structural budget problems over the next four years.
The Maryland General Assembly has until April 6, 2026 to review, amend, and finalize the budget before it takes effect on July 1, 2026.
What It Means
This is likely Governor Moore’s final budget proposal of his current term. It shows a governor pivoting from expansion to consolidation—protecting his signature priorities in education and public safety while making calculated bets on economic sectors he believes will define Maryland’s future. But the tough choices he’s avoiding now may fall to whoever sits in the governor’s mansion next.
