Hogan Announces Framework to Spend $2.5 Billion Budget Surplus

Gov. Lawrence J. Hogan, Jr. (R) announced on Thursday plans to spend a $2.5 billion budget surplus — which he called the largest in state history.

“The entire mission of my administration has been to leave our state in a stronger fiscal position than we found it, and that is exactly what we have done,” the governor said at a news conference Thursday afternoon.

Hogan said he intends to reinvest in Marylanders through a five-point framework, which he described as “broad outlines” of how the state plans to spend its money over the next few months.

With the excess funding, Hogan plans to:

1. Augment the state’s rainy day fund by $1.67 billion;
2. Provide tax relief for retirees;
3. Expand on the RELIEF Act of 2021 by providing additional tax relief to working families;
4. Release emergency allotments of SNAP benefits to eligible households; and
5. Direct the Department of Budget and Management to explore new benefits for state workers through annual collective bargaining with unions.

“With this budget framework, my message is pretty simple,” Hogan said. “As long as I am governor, I will continue to fight for fiscal discipline, I will continue working hard every single day to make it easier for Maryland families, small businesses and retirees to stay in our state and I will continue fighting to allow Marylanders to keep more of their hard-earned money in their own pockets so that we can continue changing Maryland for the better.”

Comptroller Peter V.R. Franchot (D) announced the budget surplus last week.

AFSCME Council 3 President Patrick Moran said in a statement Thursday afternoon that the excess $2.5 billion demonstrates that “now is the time to invest in vital public services” and state workers.

“Stagnant wages harm vital state services. Frontline employees are critical to minimizing the spread of COVID-19 and helping all Marylanders recover from the pandemic,” Moran said. “Now is the time to invest in frontline staff by ensuring they are fairly compensated with clear health and safety protocols in place to prevent outbreaks in state facilities.”

When Hogan entered office in 2013, the state was experiencing a $5.1 billion structural deficit.

And, at the start of the COVID-19 pandemic, Franchot projected a $2.8 billion revenue loss, prompting Hogan to tighten the state’s belt by implementing hiring and spending freezes and vetoing legislation that would have caused “substantial increases” in state expenditures.

Hogan credited his “decisive actions” taken in the pandemic’s early days as one of the causes for the state’s current fiscal health.

He also touted the support offered to Maryland residents, including his enactment of the RELIEF Act of 2021 and bipartisan efforts to invest federal funding into the state’s struggling workforce.

Asked why the governor chose not to direct more funding towards renters in the face of expired eviction protections, Hogan said “that’s where most of our focus has been,” and that some of the surplus in his framework will inevitably work its way to those people, too.

“I think we’re probably the best in the country at getting the rental relief and housing funds out to assist people,” he said. “We have a very low eviction rate in the state — very few people that are not able to pay the rent — but that’s where most of our focus has been.”

However, advocates have criticized the state’s pace of releasing rent relief funds. As of Aug. 31, the state and local governments have distributed about 25% of federal emergency rental assistance funding.

An estimated 131,000 households in Maryland are behind on rent, according to the National Equity Atlas.

Maryland Senate Pres. Bill Ferguson (D-Baltimore City) issued a statement shortly after Hogan’s press conference.

“As always, the devil is in the details. I look forward to seeing those details when they are released and working with Governor,” Ferguson said. “It is imperative that we make strategic investments in Maryland’s future while also getting support to vulnerable Marylanders across the State.”

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