The Joint Chairmen’s Report captures key budget decisions with big implications for policy issues such as public health. This year’s 632-page report includes new language clarifying how Maryland will calculate future funding for core public health services.
As part of the FY 2026 budget deliberations, the Maryland General Assembly added clarifying language to the budget appropriation for core public health services that could affect how funding for Local Health Departments (LHDs) is calculated moving forward. The language conditions $250,000 in FY 2026 funding on the Governor’s submission of the FY 2027 budget, clearly separating salary adjustments for State employees working in LHDs from core formula-based funding. Since fiscal 2020, cost-of-living adjustments (COLAs), merit increments, and other salary enhancements have been budgeted within the same program line as base public health service grants. This practice has created confusion about how statutory formula growth factors are applied.
From the report (page 241 of the pdf):
…provided that $250,000 of this appropriation is contingent on the fiscal 2027 budget submission including in a separate program from core public health services formula funding all salary adjustments for State employees at local health departments provided since fiscal 2020, including but not limited to cost-of-living adjustments and increments.
It is the intent of the General Assembly that beginning in fiscal 2027, the formula growth factors required by statute apply only to core public health services grant funding budgeted in program M00F02.07 from the prior year, exclusive of salary adjustments.
The budget committees shall have 45 days from the date of the receipt of the fiscal 2027 budget submission to review and comment.
Funds restricted pending submission of the fiscal 2027 budget may not be transferred by budget amendment or otherwise to any other purpose and shall revert to the General Fund if all salary adjustments for State employees at local health departments provided since fiscal 2020 are not in a separate program.
As previously reported by MACo, the existing LHD funding formula has not been updated since 1997. While MACo has long advocated for reform, there is strong consensus for a change among most parties. However, the urgency for change was underscored during recent fiscal years. In 2024, some counties were notified—after their budgets had closed—that their required local match for state funds had increased, creating confusion and financial strain.
The language expresses that the intent of the General Assembly, beginning in fiscal 2027, is the statutory growth factor should apply only to the base core public health services grant funding, not to any embedded State salary-related costs. The FY 2027 budget must, therefore, include a distinct program line that captures all discretionary State funds for LHD salary adjustments made since fiscal 2020. If this separation is not reflected in the FY 2027 budget submission, the $250,000 held in contingency for FY 2026 will revert to the General Fund. Additionally, budget committees will have 45 days to review and comment once the FY 2027 submission is received. In practice, similar conditions are placed on a segment of State funding to an agency to reinforce the wishes of the General Assembly.
While this budget language is a meaningful step toward greater transparency, it doesn’t fully eliminate the volatility that local governments face when budgeting for public health. Additional refinements, perhaps through future legislation, may be needed to ensure counties have the predictability and stability required to effectively plan for their share of core public health services.
Read the full JCR report online.
Stay tuned to Conduit Street for more information.
