Governor Wes Moore has released a fiscal 2026 supplemental budget, adjusting his original proposal to reflect updated cost projections, funding shifts, and new priorities.

The supplemental budget includes nearly $300 million in additional funding for developmental disabilities services, $37 million for the FAMLI program, and $15 million to fully fund Registers of Wills operations as the administration pushes to eliminate the Inheritance Tax.

At the same time, the supplemental budget shifts or reduces specified allocations, including $80 million in cuts to Strategic Energy Investment Fund initiatives and $37 million in reductions to proposed salary increases for non-union executive branch employees.

Significant Changes in the Supplemental Budget

• Developmental Disabilities Administration – Provides nearly $300 million in additional funding across fiscal 2025 and 2026 to cover rising service costs.
• Family and Medical Leave Insurance (FAMLI) Program – Allocates $37 million for implementation, with a proposed 18 to 24-month delay in collections due to uncertainty at the federal level.
• Registers of Wills Funding – Dedicates $15 million to cover operations in fiscal 2026, contingent on the General Assembly approving the elimination of the Inheritance Tax.
• Unemployment Insurance Surge Management – Provides $9 million to handle an anticipated increase in claims and assist with hiring displaced federal employees.
• Strategic Energy Investment Fund Cuts – Redirects $80 million from climate and energy initiatives to provide General Fund relief, while increasing funding for low-income energy assistance.
• State Employee Salary Reductions – Cuts $37 million from planned salary increases for non-union executive branch employees, while maintaining wage increases for unionized state workers.

Budget Gaps and Cost Shifts Still Loom

While these changes reflect updated revenue forecasts and shifting priorities, the state still faces a $3 billion shortfall in fiscal 2026, with projected deficits growing to $6 billion by fiscal 2030.

Counties remain concerned about significant cost shifts and cuts embedded in the broader budget plan, including:

• Over a quarter-billion dollars in new costs shifted to counties through the Budget Reconciliation and Financing Act (BRFA).
• The potential impact of state tax policy changes on local revenues is still uncertain, particularly with pending income tax proposals.
• Federal funding uncertainty remains a significant concern, as it could trigger mid-year budget adjustments that impact state and local finances.

What’s Next?

As the General Assembly continues budget negotiations, counties must remain engaged in discussions on cost shifts, local tax revenues, and long-term funding sustainability. MACo will continue advocating against unfunded mandates and revenue reductions that strain county budgets.

Stay tuned to Conduit Street for updates as the budget process unfolds.