State Rolls Out Voluntary Separation Program to Help Meet Budget Targets

Governor Wes Moore has authorized a new Voluntary Separation Program (VSP) for State employees, part of an effort to trim costs and meet the personnel savings required in the fiscal 2026 State budget.

The program, launched on July 10, is available to eligible Executive Branch employees and offers a financial incentive for them to separate from State service voluntarily.

The move comes in response to budget constraints passed by the General Assembly earlier this year, which called for a reduction in salary and benefit expenses across State agencies. The VSP aims to help the State meet those targets while avoiding involuntary layoffs.

How It Works

The program is open to permanent, full-time Executive Branch employees with at least 24 months of continuous State service. Workers who are approved to participate will receive:

  • A lump sum of $20,000, plus $300 for each year of State service
  • Six months of State-paid health and life insurance
  • Payout of unused annual and compensatory leave

  • Eligibility for COBRA coverage after State-paid benefits end

Applications must be submitted by Monday, August 4, and approved participants will sever State employment by September 30. Those who participate in the program will be barred from returning to State service — in any capacity — for 18 months.

Agencies and the Secretary of Budget and Management must approve applications—no quotas or mandatory targets, but final approval is discretionary.

What It Means

The VSP is one of several cost-control tools the State is deploying to close budget gaps heading into the next fiscal year. While the program excludes specified agencies and classifications, counties may still feel the effects, especially where State employees support shared or local operations, such as public health, transportation, or emergency services.

The VSP offers employees a path to leave on their terms. Still, the scale of participation — and the State’s ability to backfill key positions — could affect service delivery across Maryland.

Visit the Maryland Department of Budget and Management website for more information.