Counties Caught in Federal and State Budget Cost-Shifting

As budget debates heat up in both Washington and Annapolis, one troubling pattern has emerged: cost-shifting.

When federal and state leaders avoid tough fiscal decisions, the burden often “hot potatoes” into the hands of local governments, forcing difficult choices about taxes and essential services. For example, currently, Congress is debating a massive fiscal package with proposals that could drastically cut Medicaid funding. If they cut their federal contributions or reduce them, Maryland could face a billion-dollar shortfall—yes, with a “b.” This forces the state to either absorb the cost or toss it along to the counties.

At the same time, Maryland is grappling with its own budget difficulties. Instead of cutting essential services that residents have come to expect or raising state revenues, counties could see a shift in the financial responsibility of property assessments, teacher pensions, or special education falling into their laps. This approach balances the state’s books on paper but places another burden on local governments that must provide essential services to its residents.

Counties, now stuck with a very hot potato, don’t have the luxury of tossing it to the next player. MACo is working in Annapolis to find other solutions where counties aren’t left holding the bag.

See Executive Director of MACo, Michael Sanderson’s full breakdown of the issue below: