Does Maryland's Public Health Funding Still Fit?

Maryland’s public health funding formula was built for a different era, raising questions about whether it still meets the needs of today’s local health departments. The funding pattern in recent years argues for more clarity and predictability.

Introduction:

Local health department funding is a shared responsibility between the state and county governments. A critical component of local health department funding support is core funding, established through a statutory formula, provided by the State and matched by counties. As previously covered by MACo, core funding for local health departments is intended to “keep the lights on” by providing the necessary baseline for essential health services.

History:

Maryland’s core funding formula dates back many years, even before it was first written into statute in the mid-1990s. It established a baseline level of State support for local health departments, with counties contributing a required local match. Annual adjustments for inflation and population growth helped the formula keep pace with routine increases in operating costs, but it did not account for every expense local health departments would face over time.

In particular, it did not provide funding for state-approved salary increases, cost-of-living adjustments, or other compensation-related expenses for the many local health department employees who are state employees. As the State approved raises and benefit increases over the years, counties were increasingly expected to absorb those additional personnel costs, even though they were outside the core funding formula.

To address those gaps, the State began providing discretionary salary support to help local health departments offset compensation costs. Although these payments were not required by statute, they became an important part of the State-local funding partnership and helped counties manage workforce costs that the formula did not address. Local health departments came to rely on both the statutory core funding formula and discretionary support to maintain staffing and deliver essential public health services.

While public health has changed dramatically over the past three decades, the formula has remained largely unchanged. As previously covered by MACo, between fiscal 2008 and 2010, significant cuts were made to the public health formula, bringing the core funding number below even the established minimum from 1997. At the same time, local health departments were being asked to do more. The COVID-19 pandemic, the opioid epidemic, growing behavioral health needs, and an expanding range of environmental health responsibilities all placed new demands on a funding model that had changed very little over the years. Federal public health funding has also become increasingly uncertain, placing even greater importance on stable state and local investment.

The FY 2027 Budget:

In recent years, the General Assembly has taken deliberate steps to strengthen and stabilize funding for local health departments, recognizing that predictable investment in public health infrastructure is essential to protecting community health and preparing for future emergencies. The statutory core funding formula was intended to provide that stability by ensuring support grows over time through annual adjustments for inflation and population growth.

The FY 2027 budget met the letter of that statutory obligation. The Governor’s budget included the required increase to core funding, bringing the formula to approximately $80 million, consistent with legislative intent. However, to accommodate this increase within existing budget constraints, it appears the Maryland Department of Health reduced discretionary salary support funding to local health departments by an equivalent amount.

On paper, the statutory “core” funding formula received the required increase. In practice, much of that increase was offset by reductions to a funding source to the same set of recipients that, while never required by statute, had become an important part of how local health departments financed their workforce.

As a result, total funding for local health departments remains effectively flat compared to the prior year. Moreover, the majority of county health departments will experience an overall reduction in funding, alongside diminished flexibility to manage local workforce and operational needs.

This approach may satisfy the technical requirements of the statute, but it undermines its clear purpose. The General Assembly intended to increase and stabilize funding for local health departments, not to substitute one funding stream for another. Offsetting core formula funding with reductions in discretionary support leaves counties and local health officials managing tighter budgets despite growing public health demands, workforce pressures, and ongoing service obligations.

Looking Ahead:

Looking ahead to the 2027 legislative session, counties and local health departments would welcome a comprehensive review of Maryland’s core funding for local health departments. This could include an in-depth assessment of the existing formula, modernization of the funding model to better reflect today’s public health system, and a review of state budget timelines to determine whether they can be better aligned with local timelines. With some changes, funding and budget processes could bring a more transparent, sustainable, and predictable funding structure that reflects current public health responsibilities and provides counties with greater certainty as they plan and deliver essential services.

A proper assessment could examine whether the current formula adequately reflects the realities of modern public health, as well as evaluating how funding accounts for health inequities, socioeconomic conditions, geographic differences, changing population needs, and the true cost of delivering foundational public health services. A review could also consider whether the current allocation methodology equitably serves jurisdictions across the state and supports long-term sustainability. Any sort of review must include a collaborative process involving the Maryland Department of Health, counties, and local health departments to improve transparency while continuing the State’s role in allocating funds.

Local health departments are often the public’s first line of defense against emerging health threats, but they also provide many of the routine services residents depend on every day. As Maryland evaluates the future of public health funding with significant federal uncertainty, the conversation is expanding beyond the size of annual appropriations. With federal funding becoming less certain, public health responsibilities continuing to grow, and a funding formula that has remained largely unchanged for decades, many believe the time has come not only to preserve local health department funding, but to modernize how Maryland supports this essential state-local partnership.

This article is part of MACo’s Policy Deep Dive series, where expert policy analysts explore and explain the top county policy issues of the day. A new article is added each week – read all of MACo’s Policy Deep Dives. 