The Truth About the "Surplus"

The State’s cash surplus in 2022 was a sugar high of one-time payments from federal
COVID-19 funding that papered over a long predicted structural deficit.

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Nearly every state had a surplus in the years following the pandemic, but just because
a state had a cash surplus in 2021 and 2022, that doesn’t mean it solved its structural
problems. If you habitually spend more than you make but get a bonus two years
in a row, you’re still in long-term debt.

The end of COVID funding and lack of robust economic growth made this fiscal
challenge predictable. Yet, Maryland did not have a long term solution to deal with it.

While our economy flatlined and our budgets grew, the former governor spent down
our cash balances–spending down $5.5 billion in general funds to $2.3 billion in his
last budget. He even staged a failed press stunt on his way out of office to show that
he would have been even more fiscally reckless– spending down the cash surplus
even more to just $500 million, including spending $350 million on sundry projects
with no clear strategy.

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• The former governor also left the state with massive liabilities that the
  Moore-Miller Administration had to clean up. This included: his failure to
  address long standing reports of neglect and abuse at Charlotte Hall, the
  Purple Line boondoggle that left the state with billions of dollars in overrun
  costs, a frivolous lawsuit against State Center developers that wasted millions
  in taxpayer money, and persistent wage theft at our corrections facilities that
  led to one of the largest settlements of its kind in the nation.

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In contrast, Governor Moore’s first budget proposal left $820 million cash surplus
and preserved $1 billion to fund the state’s most strategic priorities, the Blueprint and
transportation, which were neglected by the previous administration.

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Before he became governor, Governor Moore was clear that the surplus was short-term and he would exercise fiscal discipline to ensure the government was a good steward of taxpayer money. As governor, he has done just that.

 

• For the third year in a row he has introduced a budget with general funds smaller than the last – something that hasn’t happened in a decade.

 

• Governor Moore’s budgets have maintained more than $2 billion in the Rainy Day Fund each year, well-above the recommended levels, and kept positive cash balances with a balanced budget. He did this even while managing the impacts of the Francis Scott Key Bridge collapse–one of the greatest disasters to hit our state.
   

• This year, Governor Moore’s proposed budget not only closes the $3 billion cash deficit and shrinks the structural deficit by $2.25 billion, but it also delivers a tax cut for nearly ⅔ of Marylanders, preserves record funding for education, and makes targeted investments to jumpstart our economy and invest in our people.

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The former administration did not provide an accurate portrayal of the state's economic outlook. The number of liabilities, completely wrong projections, and economic indicators did not add up to the real story. It took Governor Moore and his team months to unpack that, devise a plan, and move forward. They were deliberate and thoughtful about mapping a strategy to our assets, which is the definition of good governance. Saying you're "open for business" may sound nice, but it doesn't actually open any businesses, or ensure state government is meeting its responsibilities to its citizens.

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When Governor Moore entered office, he was clear that the budget had to be strategic, intentional, and reflective of state priorities. He has reiterated that while he did not cause this problem, he will address this problem, and that the key to long term success is robust economic growth and fiscal responsibility. That is exactly what his budget proposal delivers.

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