In July, the Maryland Board of Public Works approved $12M in budget cuts to local health departments.

As previously reported by MACo, to ease pressure on the State’s budget and reallocate resources, Governor Wes Moore proposed significant budget cuts at the beginning of the new fiscal year, which the Board of Public Works approved. These $149 million in reductions impact dozens of State agencies and programs, with local health departments facing substantial impacts.

Local health departments saw a $12 million reduction in funding, a nearly 10 percent decrease from the original $123.2 million allocation, affecting their ability to provide essential public health services.

Local health department funding has been inadequate for years, especially during the COVID-19 pandemic. A statutory formula was set in 1997, but cuts in 2008–2010 dropped funding below the minimum.

As previously reported on Conduit Street, in 2023, Maryland’s budget only restored funding levels to those from 2008, which is insufficient given today’s public health needs. A 2022 report by the Department of Legislative Services (DLS) highlights that public health, which includes areas like disease control, environmental health, and maternal care, relies heavily on local health departments.

Like many states, Maryland continues to struggle with rising mental health challenges, drug overdoses, and health disparities. The COVID-19 pandemic further demonstrated these gaps in areas like workforce shortages and data sharing.

The $12 million reduction may force health departments to reduce services, cut staff, or scale back outreach efforts directly affecting vulnerable populations, including aging residents, low-income residents, and those with chronic health conditions.

The consequences could be especially profound in counties with smaller budgets and underserved and rural populations. Rural counties already face challenges in maintaining healthcare infrastructure, and these budget cuts will likely widen existing gaps in care.

This reduction could also limit the ability of local health departments to respond to public health emergencies or implement preventative programs to reduce long-term health costs.

Local health departments, positioned at the heart of their communities, directly address specific needs with greater agility and responsiveness than larger, centralized state agencies due to their understanding of local needs. Overall, these cuts could strain the resources of local health departments, making it more challenging to fulfill public health missions and meet the needs of their communities.

Additional Funding Issue: Unanticipated Local Match Increase

In addition to these funding reductions, local governments faced another financial challenge related to matching State core funds. The State began funding local health departments and services over a half-century ago, requiring local governments to match these core funds based on a formula established in 1997.

This formula accounted for each jurisdiction’s revenue-raising ability. This matching requirement remained manageable for years, as local contributions often far exceeded the minimum match.

However, in fiscal 2024, the State allocated new funding for their employees stationed at State and local agencies. Curiously, this non-core discretionary salary increase was included in the local match calculation.

Counties learned of this change only after finalizing their fiscal 2024 budgets, leading to an unanticipated increase in local funding obligations — in one county, the match nearly tripled compared to the previous year. The change prompted confusion and eventual waivers.

In the 2024 legislative session, MACo’s advocacy led to budget language that clarifies the matching fund requirement for local health department funds should not apply to salary-related or similar discretionary funding. Furthermore, for fiscal 2025, the matching fund requirement cannot exceed the county’s actual contribution from fiscal 2024.

DLS requested a report (due in the fall of 2024) to clarify these funding streams and how they affect the local match formula. After the DLS study and agreement with the Maryland Department of Health, legislators may introduce potential refinements or clarifications in upcoming legislative sessions, especially if the Department seeks to establish new statutory matching obligations based on other funding streams.

Stay tuned to MACo for updates.