Senate President Bill Ferguson will talk about the upcoming legislative session Jan. 7 in his office at the State House in Annapolis. Photo by William J. Ford.
The Senate president is warning Maryland lawmakers they will have to walk a tightrope this legislative session to uphold the state’s priorities while closing a $2.7 billion budget deficit — and that’s before possible cuts in federal funds. the state relies on.
Or, as Senate President Bill Ferguson (D-Baltimore City) put it in an interview on Tuesday: “There will be cuts.”
If cuts aren’t enough, he says, revenue increases are also on the table.
“We have to live within our means. “Everything is on the table to adjust formulas or… projected expenses,” Ferguson said. “We need to take a measured approach, which will be a difficult conversation – something we haven’t had to do in the last six years because of the federal funds that are available.”
The 2025 legislative session, which takes place Wednesday, will need to close a $2.7 billion budget gap in the 2026 budget year, a shortfall that will worsen in coming years if the state doesn’t address the shortfall now.
Ferguson warned that there will be adjustments “across the board” as lawmakers consider trimming current projects and evaluating programs to see which ones are effective and where the money could be spent elsewhere.
“We’re really preparing our members and people to know that we have to live with what’s feasible,” he said. “If we cannot make it through cuts alone, we will have to look at income.”
In the event tax increases are considered, Ferguson wants the state to “take a progressive approach – those who have earned more and benefited more will likely have to contribute more.”
“The vision for that will be number one: protecting Maryland families from rising costs. “Anything we do to generate additional revenue will actually try to prevent the average family from seeing higher prices,” Ferguson said.
“So we need to focus on those who have done well and benefited from Maryland’s economy, who have benefited from the stock market, who have $500,000 to a million dollars in capital gains in one year – (they) may want to share more to help us ensure that we can do things like provide dental care to seniors on Medicaid,” he said.
“We will also look for places where revenues are protected by companies or where deductions have been made in the past that may not be as productive as they need to be,” Ferguson said.
He said raising revenues “is the last option… but it is not off the table yet. We are going to try to live within our means first, and if we cannot fully achieve that, we will have to explore different revenue measures.”
Amid possible cuts, Ferguson wants to keep as many people on Medicaid as possible.
“These are Marylanders who are really the most vulnerable. I fundamentally believe that as a public sector we have a duty to help meet their needs,” he said. He said any revenue increase could help maintain current Medicaid programs and enrollment during the fraught fiscal year.
That said, “there may also be places” in Medicaid that the General Assembly may need to “adjust.”
“Every aspect of state government should expect a top-to-bottom overhaul and the potential for a new reality moving forward,” Ferguson said.
That includes the Blueprint for Maryland’s Future, the state’s sweeping education reform, he said.
“We are not going to back down on our commitment to Blueprint,” Ferguson said. “The good news is that the budget challenges we face today are not related to the Blueprint – it is fully funded with dedicated funds in FY 2027. If we were to make changes to Blueprint, it would not impact the bottom line, but would simply extend the special fund for a longer period of time.”
In addition to considering the budget, Ferguson said the Senate will pay “a lot of attention” to energy policy this session.
“There are some very real concerns about the rising cost of energy and electricity here in Maryland due to reduced supply and increased demand,” he said. “We have to get out of the session and create opportunities to mitigate that.
“We will spend a lot of time this session sharpening our energy market to expand with an all-of-the-above approach to solar, onshore wind, geothermal, nuclear and natural gas, in a way that really protects taxpayers from those rising costs,” he said.
Working with Trump
But these and other plans could run afoul of the new administration of President-elect Donald Trump (R), who has promised deep cuts to federal funds and federal agencies. Ferguson said massive federal cuts could be “devastating for Maryland,” where more than 140,000 workers held federal jobs as of March, according to the Congressional Research Service.
“The economic impact (of the Trump administration) is the biggest concern,” Ferguson said. “Hundreds of millions of dollars in contracts, billions of dollars in contracts, coming through government contracts and defense contractors… I’m hopeful it’s not as draconian as projected, but we have to be prepared for it.”
The plan for the state is to play nice with the Trump administration, agree on priorities and avoid conflict “where we can” in an effort to protect Maryland’s current support through federal funding.
One area where the state and the Trump administration could come into conflict is on immigration: Trump has pledged to deport millions of undocumented immigrants during his second presidency.
“I’m also concerned on the immigration front, that we don’t go too far in the enforcement of federal law, and that we don’t create terror in communities,” Ferguson said. “I’m very concerned about how that will play out and the psychological impact of that.”
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He said state and local authorities will work with federal agents to “ensure that the people who commit violent crimes are deported…. But creating fear and anxiety in immigrant communities, I think we’ll take that very seriously.”
That said, the state is reluctant to punish the Trump administration too much for fear of antagonizing the White House and risking losing federal support. That extends to Maryland, which may lose the new FBI headquarters planned for Greenbelt. While Ferguson believes plans are too far along to easily change direction and build the new FBI campus elsewhere, he says the state will get a better picture in the first 60 days of Trump’s term.
“We are very dependent on the federal government,” Ferguson said. “And so there are a lot of places where we are highly exposed to the fact that if we actively participate in the opposition, it could have enormous consequences for the people of Maryland who live here.” And that is not something we want to facilitate.
“We will start from the premise of working together and hope that this is the premise,” he said.
