Wes Moore took office in January 2023 and has been riding an extended honeymoon. He has basked in gushing national press coverage, including cover stories in the New Yorker, Time, and Vogue that have propelled his political brand and turned him into a national figure and fundraiser. He is on a short list of young Democrats described as the party’s future and even mentioned as a 2028 presidential candidate. But let’s not get ahead of ourselves.
In 2022, Moore proved a formidable political talent, coming from behind to beat better-known Democratic opponents in the primary (Tom Perez, Peter Franchot). He then soundly trounced his Republican opponent, Dan Cox, with 64.5 percent of the votes. It did not hurt that the former, popular, two-term Republican Governor Larry Hogan called Cox a “Q-anon Wack Job.” Moore became the first black Governor in Maryland and only the third in US history.
However, Moore is about to have a significant political moment as his honeymoon ends. Real governing and tough decision-making began with the 2025 budget process, which has moved front and center in a state requiring a balanced budget. The sausage-making for the fiscal year 2025 budget (July 1, 2024-June 30, 2025) is underway, and Moore must submit a balanced budget to the General Assembly this week.
When Moore took office and submitted his 2024 budget only a year ago, things looked pretty good. In his first budget cover letter, he painted a rosy financial picture. Working from budget projections his new team was provided, he wrote, “We are in a fortunate financial position to craft a budget with significant positive General Fund cash balances” but warned of economic uncertainty. Analysts projected 2024 budget surpluses of $232 million in 2025 and $263 million in 2026.
However, in July 2023, there was a sudden swing from the rosy budget surplus projection to a deficit now estimated to be $761 million, growing to over $2.7 Billion in four years. This new financial reality will test Moore’s slogan, “Leave No One Behind,” and his ability to implement the key initiatives he touted as a candidate and during his first year in office.
The dark financial clouds appeared last summer when the Department of Legislative Services issued a report detailing so-called “structural budget deficits” that appeared after the 2023 General Assembly session. During this session, Moore’s first initiatives that he talked about on the campaign trail passed, among other Democratic initiatives, by Democratic majorities in Annapolis, according to Maryland Matters.
Moore’s initiatives included extending the tax credit for military retirees, the Family and Medical Leave Insurance Program, permanent extension of the State Earned Income Tax Credit (EITC), and increasing the State’s minimum wage to $15 per hour that took effect in October 2023. The cost of these programs was not surprising to anyone and was part of Moore’s legislative agenda that helped propel him to such a large election victory.
The explanations for how the State’s finances so dramatically swung from surpluses to deficits have been weak from the various people and departments that report on the State’s financial health. Some have deflected, saying that dealing with deficits is the ordinary course of business when balancing the budget or resulting from a blurry sugar high coming out of COVID, which funneled lots of Federal money into the state.
A Washington Post article addressing the deficit noted that, according to Moore, “A similar dynamic has played out ahead of 17 of the past 20 budget cycles, Moore noted, with politicians pushing for policy wins passing legislation without putting money behind their plans. As Moore said Thursday, “We put everything inside of budgets without a plan on how to pay for it, and the budget gap is the result.” He added, “The hard thing means actually fixing a system that’s broken, so that we can lead and not simply sustain.”
Whatever the reason, it is what it is.
The bigger issue is how our first-term governor will handle this budget challenge. The State’s budget in 2024 was $63 billion. Moore has to find cuts or more revenue to offset the projected $761 million shortfall in the 2025 budget cycle. Moore moved quickly to prepare everyone to make tough decisions in the 2025 budget at the August Maryland Association of Counties summer conference in Ocean City.
He told the crowd this was the season of discipline and added that everyone had to “put on their big boy pants.” He could have done without the patronizing football coach tone, and I expect many Republican and Democratic legislators, who have been through numerous budget cycles, winced at the comment. Not to mention female legislators and maybe his Lieutenant Governor Aruna Miller, who don’t own big-boy pants. I expect next year, he will stick to “We have a job to do.”
It would appear Moore’s wardrobe suggestion also applies to himself. He has already laid out some austerity measures, both large and small, to prepare for the budget submission. As a candidate in political sales mode, he promised as Governor to end child poverty, add 5000 state employees, create a transformational national service program, rebuild our schools, and implement various expensive education, infrastructure, and transportation projects.
The Baltimore Sun wrote, “The administration has detailed $3.3 billion in cuts to the state’s six-year transportation agenda while maintaining support for the multibillion-dollar Blueprint educational reform plan and announcing climate goals that would cost $1 billion more each year.” Moore also has backed away from his pledge to hire 5000 state employees, and his Service Program is modest compared to the press hype used when it was announced.
A big budget challenge will be finding creative ways to deal with The Blueprint for Maryland Future, a multi-billion dollar educational reform program based on the Kirwin Commission. Passed in 2021, the plan was designed to revamp the State’s public schools and early childhood programs funded by a combination of the State and Counties. The plan calls for increasing teacher salaries to $60,000 annually, among other big-ticket expense items.
The Counties are nervous regarding their ability to absorb their share of the cost of the program and want flexibility on its implementation, and the State is concerned about what happens when a combination of Special Funds and revenue currently earmarked for education reportedly runs out in 2027, shifting the budget responsibility to the General Fund, becoming part of the general operating budget of the state.
Governor Moore must now work with the General Assembly to craft a balanced budget, avoid raising taxes and fees as much as possible, or lay out compelling reasons for their need. Moore’s private sector experience was running the Robin Hood Foundation, a non-profit that raised lots of money and gave it to worthy non-profit organizations. Balancing a budget is much harder since you can’t avoid making someone unhappy.
Moore is lucky to have a Democratic supermajority in the House and Senate to help him get what he wants and be able to sign off on the 2025 budget. This contrasts with another rising star in the Democratic party, Governor Andy Beshear. He governs in conservative Kentucky and must have a balanced budget, but must work with a State House as red as Maryland is blue.
Governor Moore continued discussing the state’s fiscal health at the Maryland Association of Counties’ winter meeting. He told the crowd, “Our administration did not create the budget gap. But let me be very clear: We refuse to ignore it, and we refuse to push policies that will only make it worse. We might not have caused this problem, but we will address this problem”.
Moore is a telegenic political talent and now must prove himself as a skilled chief executive for the state, balancing complex financial realities with lofty legislative goals while maintaining his pledge to “Leave No One Behind.” No one said this was going to be an easy gig.
Hugh Panero, a tech & media entrepreneur, was the founder & former CEO of XM Satellite Radio. He has worked with leading tech venture capital firms and was an adjunct media professor at George Washington University. He writes about Tech and Media and other stuff for the Spy.