PROJECTMaryland

State Fiscal Briefs

May 2022

Looking for Maryland data related to the pandemic? We have health, economic, and fiscal data on our new tool, How the COVID-19 Pandemic is Transforming State Budgets.

Maryland’s budget basics

According to the National Association of State Budget Officers (NASBO), Maryland’s total expenditures in fiscal year (FY) 2021 were $56.4 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2021 were $2.7 trillion, ranging from $4.7 billion in Wyoming to $512.8 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Maryland’s combined state and local direct general expenditures were $65.4 billion in FY 2019 (the most recent year census data were available), or $10,798 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $10,161.

Maryland’s largest spending areas per capita were elementary and secondary education ($2,389) and public welfare ($2,303). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Maryland’s combined state and local general revenues were $67.7 billion in FY 2019, or $11,180 per capita. National per capita general revenues were $10,563. Maryland uses all major state and local taxes. Maryland’s largest sources of per capita revenue were individual income taxes ($2,628) and federal transfers ($2,415).

Maryland’s politics

Governor Larry Hogan, a Republican, was elected in 2018 with 55 percent of the vote. The next gubernatorial election is in 2022.

Maryland has a divided government. Democrats control both the House of Delegates (98 Democrats to 42 Republicans) and Senate (32 Democrats to 15 Republicans), with veto-proof majorities in both houses. The entire legislature is up for election in 2022 because both delegates and senators serve four-year terms.

Maryland’s budget institutions, rules, and constraints

Maryland uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. While the General Assembly recommends a spending limit to the governor, there are no enforced tax and expenditure limits. There are, however, limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Maryland’s current budget

Governor Hogan released his FY 2023 budget proposal and gave his state of the state address in February 2020.

Maryland enacted its FY 2022 budget in May 2021. The enacted budget included $54.2 billion in total spending and $20.9 billion in general fund spending. Total general revenue increased 6.5 percent compared to the previously enacted budget. In February 2021, Maryland passed several tax changes related to the pandemic recovery, including increasing the state’s earned income tax credit (EITC) from 28 percent of the federal credit to 45 percent and sending one-time tax rebates to filers who had previously claimed the state’s EITC.

Under the American Rescue Plan, Maryland will receive $3.7 billion in direct state fiscal aid and $1.8 billion in local government aid from the federal government. As of January 2022, Maryland had spent part of its ARP funds on revenue replacement, education spending, capitol construction, and economic development.

According to NASBO, Maryland’s recent expenditure totals (general fund spending/total spending, including federal transfers) were:

  • FY 2021: $19.3 billion/$56.4 billion

  • FY 2020: $19.0 billion/$48.6 billion

  • FY 2019: $17.8 billion/$45.1 billion

For more on Maryland’s budget, see