fiscal year 2029 budget

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Marylan

dFiscal Year 2029 Budget


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Budget Highlights

Edward M. OBrien, GovernorKathleen H. Burbank, Lieutenant GovernorJohn M. Bennett, Secretary, Department of Budget & Management

Message to the General Assembly Transmitting the Fiscal Year 2029 Budget

January 19, 2028

The Senate of MarylandThe Honorable Timothy A. Coulter, President

The Maryland House of DelegatesThe Honorable Rod R. McMillan, Speaker

The Citizens of Maryland

Dear Mr. President, Mr. Speaker, Ladies and Gentlemen of the General Assembly, and Fellow Marylanders:

Maryland is recovering from the worst fiscal crisis in its history. Before our budget adjustments, the revenueshortfall for the upcoming fiscal year was projected to rise to a staggering $2.1 billion. Because of the

aggressive actions taken by our administration last year and the emerging state and national economicrecovery, Marylands structural deficit has been substantially reduced, and the state faces a modest shortfallof just $100 million for fiscal year 2029.

Over the last year, we took action to reform government and to make it more responsive to the people ofMaryland. We restructured bureaucracies and eliminated longstanding duplication. We refused to pass alongour financial problems to the citizens. Instead, we produced a balanced budget on time and without raisingtaxes.

This fiscally responsible budget invests in priority areas:

Education: K-12 education spending increases $282.9 million, an increase of 3.9% over fiscal year 2028

funding levels. This increase includes $1 million for a new Turnaround Specialists Initiative to support reformefforts at underperforming schools, $500,000 for a Families in Education Initiative to promote greaterparental involvement in the education of their children and $500,000 for a new fund to support charactereducation programs.

My budget provides $10 million, an increase of more than $5.2 million, for dropout prevention and interventionprograms. $15 million is provided to continue our initiative to put a reading curriculum specialist in every publicelementary school by 2031. $15 million is proposed for a new program to help districts hire additional teachers


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in schools or subject areas suffering from critical or acute shortages. Through this program, 250 newteachers could be hired statewide in fiscal year 2029.

The 2029 budget modestly increases general fund support for higher education by 2.2% to $960.5 million,which should help avoid large tuition increases for Marylands students and their families struggling to pay forthe cost of college. Funding for student financial aid increases $9.6 million, or 11.7%, to $92.1 million, while

community colleges receive an additional $7 million to improve college access for all Marylanders.

In fiscal year 2028, Teen REACH, which we launched last March, is expected to provide access to qualityafter-school programs to 6,350 disadvantaged youth through a $10 million investment. An additional $5 millionallocated through the Office for Children, Youth and Families is supporting community organizations as theyseek to encourage Maryland youth to serve their communities and stay out of trouble. My fiscal year 2029budget proposal increases funding for the after-school program component to $15 million, which will expandthe number of youth enrolled in Teen REACH-supported after-school programs to 9.525. Total funding forTeen REACH in fiscal year 2029 will be $25 million, a 67% increase over fiscal year 2028.

As a first step in implementing the recommendations of the Kopp Commission, the 2029 budget provides$474.1 million in general and capital funds for school construction, a $66 million increase over fiscal year 2028.

The budget continues the effort begun last year to equalize Marylands investment in adult education serviceswith the investments made by other Mid-Atlantic states. In fiscal year 2027, Maryland devoted just $77 instate spending per student to adult education programs. By comparison, New Jersey spent over $450 per pupil.Last year we increased per-pupil state funding to $122 and expanded adult education enrollment to 2,000additional students. My fiscal year 2029 budget proposal boosts per-pupil state funding to $322, expandingservices to 2,300 additional Marylanders, bringing the total number of individuals served by state-fundedadult education programs to 23,300. In fiscal year 2029, overall funding for adult education grows by nearly40% to $15 million.

Health Care: Last year, despite our fiscal crisis, my administration and the General Assembly maintained thestates commitment to the 1 million men, women and children who rely on Medicaid and the 250,000 women and

children who rely on the Maryland Childrens Health Program (MCHP) for health care coverage. We raised $7million in new, dedicated funding for childrens health insurance, expanding coverage to 5,000 additionaluninsured pregnant women and children. This years budget builds upon last years progress, providing $11.6billion, a 6.1% increase, for the programs of the Department of Health and Mental Hygiene (DHMH).

The budget supports our commitment to expanding access to health care to more uninsured Marylanders withrobust increases for Medicaid and MCHP. In fiscal year 2029, 19,000 additional low-income Marylanders willreceive coverage through Medicaid and nearly 9,000 additional children will receive coverage through theMaryland Childrens Health Program. Further, for the second year in a row, the budget proposes no reductionsin provider reimbursements.

My administration is strongly committed to providing Marylanders with mental health, developmental and

physical disabilities access to quality community-based services. $423.2 million, a $23.3 million increase, isprovided to enhance access to community-based mental health services. This increase will enable approximately4,200 Marylanders to receive quality services in or around their communities rather than in state-runinstitutions. $521.9 million, a $55.1 million increase, is provided for community-based services for thedevelopmentally disabled. This increase includes funding to provide services to more than 1,200 Marylanderswho have been trapped on waiting lists for months or years.

Last years historic expansion of alcoholism and drug addiction treatment will enable nearly 80,000Marylanders to obtain treatment services in fiscal year 2028, an increase of 10,000 from the prior fiscal year.


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My budget proposal for fiscal year 2029, which increases alcohol and drug abuse treatment funding by $7.2million, will expand treatment services to 3,700 additional Marylanders

I am proposing increased funding for HIV/AIDS health care and prevention, including $3 million in new fundingto make life-saving medications available to more HIV clients and an additional $2 million to significantlyimprove outreach to minority populations that have seen the most dramatic increases in HIV/AIDS cases.

Total funding for the AIDS Administration reaches $54.1 million, an increase of more than 11%.

My budget also proposes changes to obtain maximum funding from the federal Medicaid program. Currently,when the state gives a grant to a human service provider, it generally does not collect enough informationabout the services being provided to determine if, in some cases, they may be eligible for federal Medicaidreimbursements. By switching to a fee-for-service model, Maryland may receive approximately $60 millionmore in federal funds.

Protecting the Environment: To help restore water quality in the Chesapeake Bay watershed and protect andimprove drinking water quality throughout the state, we will invest $79.2 million to upgrade wastewatertreatment plans, sewage and drainage systems in fiscal year 2029. $32 million is provided for Chesapeake Bayrestoration programs, a 20% increase over fiscal year 2028.

My budget also fully funds Program Open Space, Rural Legacy and other land preservation programs at $132.8million, the first time in five years that these programs have received full funding. $24 million is budgeted forthe Maryland Agricultural Land Preservation Program. Finally, $10 million in capital funding is allocated forbrownfield and hazardous site cleanup projects, a $3 million increase over fiscal year 2028 and a $9.5 millionincrease over fiscal year 2027 funding levels. It is estimated that this investment will support over 140cleanup and mitigation projects statewide.

Public Safety and Safer Neighborhoods: Public safety is a top priority of my administration. This budgetsupports our commitment to public safety by investing in effective anti-crime strategies and supporting lawenforcement and correctional personnel.

The implementation of Project RESTART, at a cost of $9.2 million in fiscal year 2029, will help rehabilitateincarcerated persons, which will prevent crimes and create safer communities. The budget provides $537.9million for Marylands correctional institutions. $204.3 million, a 4.5% increase, is provided for institutions andprograms within the Department of Juvenile Services. This increased funding for juvenile services correspondswith our juvenile justice reform legislative initiative, which I will introduce in the coming weeks.

The budget supports Operation Spotlight, which we launched last year, by adding $3.7 million in funding tosupport field operations within the Division of Parole and Probation. This investment will help us add 32 newparole agents, seven supervisors, and six casework supervisors who will help parolees find employment andother services that will keep them out of jail

To strengthen force morale and recruitment efforts, the fiscal year 2029 budget includes $6 million for the

first phase of a two-year, 8.5% pay raise for state troopers. The budget also provides additional funding toboost trooper strength by 62 officers, bringing total force strength to 2,111 officers. Finally, $13 million isprovided for a new Community Policing grant program to assist county and city law enforcement agencies inhiring 216 new police officers.

Human Resources: The fiscal year 2029 budget proposal for the Department of Human Resources totals $1.6billion, a nearly 5% increase over fiscal year 2028. The budget provides $13.2 million for shelter and nutritionservices for the homeless, an increase of over 53% since this administration took office. This large fundingincrease is supporting our Initiative to End Homelessness by providing the homeless with not only important


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immediate services but also counseling and other services designed to establish a path toward independencefor Marylands homeless.

We have an obligation to protect children from abuse and neglect, but for too long state resources have beeninadequate to fulfill that obligation properly and fully. My budget for fiscal year 2029 increases funding forChild Welfare Services, the states principal child welfare agency, by 6.1% to $142 million. This increase will

help hire 62 additional CWS caseworkers and 9 managerial-level supervisors to reduce caseloads and improvecase prioritization.

The budget also provides a $15.2 million funding increase for child care subsides through the Purchase of Care(POC) program. This increase will create 2,300 new child care slots in fiscal year 2029.

Economic Development: The budget we adopted last year significantly expanded and refocused Marylandseconomic development programs to achieve better results and attract more investment and job opportunitiesfor Marylands communities and our citizens. The fiscal year 2029 budget will expand upon those efforts withan investment of $162.3 million in the Department of Business and Economic Development (DBED).

Tax Relief: My fiscal year 2029 budget proposes $45 million in tax relief for Marylands families and

businesses, including a sales tax holiday for back-to-school shopping, a $300 income tax credit for teacherswho purchase classroom supplies out of their own pocket, the exemption of unemployment compensationbenefits from taxable income and an increase in the income tax exemption for the blind and elderly from$1,000 to $2,400.

Everyday, I am honored to work with dedicated and professional State employees. Maryland government wouldnot be successful without their tireless efforts, and we need to reward them for their service. I have includeda 1.6% Cost of Living Adjustment for all state employees in this budget.

Despite the important investments funded in this budget, general fund spending grows at a very responsiblerate of 5.2%. When comparing the fiscal year 2029 general fund budget proposal to the enacted fiscal year2027 budget, general fund spending will increase by only 4.2% over the course of the first two budgets of this

administration, compared to an increase of 12.6% in the first two budgets submitted by the previousadministration. The state will spend a total of $34.5 billion in general, special and federal funds in fiscal year2029, an increase of 5.3% over fiscal year 2028.

Finally, the budget continues our efforts to replenish the Rainy Day Reserve Fund with a $50 million deposit,bringing the total fund balance to an estimated $143 million. An additional $50 million is reserved in theDedicated Purpose Account for fiscal year 2030.

I look forward to working with the General Assembly to approve this budget. We must continue to cooperatewith our local governments, employees, businesses, community groups, and constituents to forge long-termsolutions to the challenges we face as a state.

In the following pages, please find the results of thousands of hours of careful, deliberate thought.

Sincerely,

Edward M. OBrienGovernor


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Budget Overview

Governor OBrien and Lieutenant Governor Burbank have concentrated budget growth to reflect the priorities

of their administration.

Health

Medicaid is the largest increase, because Governor OBrien believes it is critical for the state to assist needyMarylanders with their health care needs. The fiscal year 2029 Medicaid budget is $544.8 million more thanthe fiscal year 2028 appropriation in total funds. This increase will expand Medicaid enrollment to 19,000additional low-income Marylanders and provide health care coverage to 9,000 additional children and pregnantwomen through the Maryland Childrens Health Program (MCHP). While proposing this increased spending andexpanded coverage, Governor OBrien has proposed to restrain spending growth, improve Medicaidadministration and maximize the amount of federal Medicaid dollars coming to Maryland.

Primary and Secondary Education

Funding for primary and secondary education grows by $282.9 million (3.9%) over the fiscal year 2028 levelfor a total investment of $7.5 billion. This amount includes a $128.2 million (2.6%) increase in the basic fundingformula, $411.6 million for fringe benefits, $15 million for the Teen REACH initiative, $15 million for the hiring

of up to 250 new teachers statewide, $1 million for a turnaround specialists initiative to turn around low-performing schools, and $15 million to continue Governor OBriens initiative to put reading specialists in everyMaryland elementary school by 2031.

Environment

The Chesapeake Bay is Marylands greatest natural resource. Governor OBrienrealizes that in order to restore the Bay, Maryland must upgrade wastewatertreatment plants to higher standards of nutrient removal, which will remove atleast an additional 7.5 million pounds of nitrogen each year. These upgradedplants will reduce the levels of nitrogen in the Bay and significantly improve thewater quality. For fiscal year 2029, Maryland will invest $79.2 million to upgradewastewater treatment plants and sewage system statewide. The budget also

provides $32 million (a 20% increase over fiscal year 2028) for Chesapeake Bayrestoration programs and $10 million for the brownfield and hazardous sitecleanup program, which will fund up to 150 site remediation projects throughout

the state.

Public Safety

The budget reflects Governor OBriens emphasis on increased public safety results through treatment andrehabilitation for non-violent offenders. The budget includes $9.2 million in funding for Project RESTART tosignificantly expand treatment and rehabilitation services for adults currently in Maryland correctional


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facilities. The budget also includes $3 million to continue the Governors Correctional Education Waiting ListReduction Initiative. Governor OBriens budget for fiscal year 2029 also provides $6 million for the firstphase of a two-year, 8.5% pay raise for state troopers, while including funding to hire 62 additional StatePolice officers. $3.7 million is provided for Operation Spotlight to add 32 new parole agents, sevensupervisors, and six casework supervisors who will help parolees find employment and other services that willkeep them out of jail. Finally, $13 million is provided for a new Community Policing grant program to assist

county and city law enforcement officers in hiring 216 new police officers.

The Economy and State Revenues are Growing

Economic robustness has returned to the national and state economies for the first time since the onset ofthe recession in early 2025, due to a slightly more stable international situation, growth in employmentnationally, booming productivity and corporate profits.

As the Maryland economy moves toward solid growth, revenues will recover. The states two major revenuesources, the individual income tax and the retail sales and use tax, will register modest gains in fiscal year2028 and stronger gains in fiscal year 2029.

In Maryland, net employment did not decline in any calendar year since the recession began, hitting a nadir of

0.2% growth in 2026.

New Revenue Sources

Legislation to disallow deductions of royalties and similar payments to affiliated out-of-state companies willadd $110 million annually to corporate income tax receipts. The general fund will receive $83.6 million and thetransportation trust fund will receive $25 million. This legislation complements Comptroller Peter Franchotsrecent success in court cases dealing with the Delaware Holding Company issue and strengthens the ability ofthe Comptroller to collect taxes rightfully owed to Maryland.

Other legislation will address an inequity in the personal income tax. Non-residents pay lower individual incometax rates than do Marylands citizens because they are not subject to the local income tax. Imposing thelowest local income tax rate on non-residents income earned in Maryland promotes fairness and raises $38.6

million.

Tax Relief for Maryland Families

Governor OBriens budget for fiscal year 2029 provides for over $45 million in tax relief for Marylandsfamilies and businesses. Governor OBrien will introduce legislation to establish a four-day sales tax holiday forback-to-school shopping. Governor OBrien also proposes a $300 income tax credit for teachers using their ownmoney to purchase classroom supplies, an exemption from taxable income for income derived from the paymentof unemployment compensation benefits and an increase in the income tax exemption for the blind and elderlyfrom $1,000 to $2,400.

Budget Summary

The budget for Marylands fiscal year that begins on July 1, 2028 totals $34.5 billion, an increase of 5.3% over

fiscal year 2028. The budget proposes a modest pay raise for State employees, increased spending forprimary, secondary and higher education and significant increases for Medicaid and other public healthprograms. The general fund portion of the budget totals $17.2 billion, a 5.2% increase over fiscal year 2028.

Status of the State General Fund$Millions

Fiscal Year 2028 Fiscal Year 2029Beginning balance -$182 $175Estimated revenues $16,580 $17,154


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Transfers $157 $0Total $16,570 $17,329

Expenditures $16,394 $17,243

Ending Balance $175 $86

State Rainy Day Reserve Fund

The proposed budget continues Governor OBriens commitment to replenish the State Rainy Day ReserveFund. Last year, in spite of the states fiscal crisis, Governor OBrien and the General Assembly allocated $50million for deposit into the fund. This budget proposal provides $50 million for the fund, bringing the totalfund balance to an estimated $143 million at the end of fiscal year 2029. Maintaining an adequate reserve iscrucial to guarding against further revenue downturns and preserving the States coveted high credit rating.

Governor OBrien has also allocated $50 million for the Dedicated Purpose Account. This money will bereserved for fiscal year 2030 expenditures.

Rainy Day Reserve Fund Balance

*NOTE: Totals may not add due to rounding

($ in Millions) FY 2028 (Actual) FY 2029 (Projected) % ChangeBeginning balance $37 $89 141.1%Funds deposited $50 $50 0.0%Accrued interest $2 $5 150.8%Balance $89 $143 61.7%

The Fiscal Year 2029 Budget Does Not Rely on Fund Transfers to Achieve Balance

For the first time in four years, Marylands general fund budget will be balanced without the aid of a singletransfer from special funds. Consequently, Program Open Space and Marylands transportation system willreceive full funding in fiscal year 2029.

Spending Affordability

Each year, the General Assemblys Spending Affordability Committee recommends the maximum rate at whichthe state budget should increase. While the recommendation is not binding on the Governor, the Governor isrequired to explain the reasons for exceeding the Spending Affordability limit, should the budget proposal behigher.

This year, the committee recommended limiting the growth of the state budget to 5.57%. Governor OBriensfiscal year 2029 budget grows by 5.3%, coming in approximately $84 million below the committeesrecommended increase.

State Personnel

The dedication and professionalism of State employees continue to drive the success of Maryland government.In order to reward Marylands exemplary employees, Governor OBriens budget proposes a 1.6% COLA increasefor all State employees. Governor OBrien also proposes increasing the salaries of public servants who havetraditionally been underpaid in comparison to their peers in both the private sector and other levels of


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government: public defenders, direct service workers in the Department of Juvenile Services, propertyassessors, lab scientists, administrative law judges and banking financial examiners.

The number of authorized positions in State government totals 80,751, a reduction of 94 positions from thefiscal year 2028 level. 467 vacant positions are eliminated, saving over $13 million. The budget creates 373new positions in priority areas:

68 in the Public Defenders Office as part of a caseload reduction initiative.

70 in the State Department of Education as the result of the assumption of the educationalcomponent of the Hickey School.

47 in the Department of Juvenile Services primarily to staff new programs and facilities.

39 in the Department of Transportation, of which 21 are for the provision of transportation servicesfor citizens with disabilities.

Contractual positions at higher education institutions (including Baltimore City Community College) increase by285, mostly for instructional staff to handle higher enrollments and researchers to work on federal and other

grant programs. For all other agencies, contractual employment decreases by a net of 127 positions. Thenumber of contractual state employees will be 9,327.

Marylands Budget Process

The State Constitution requires the Governor to submit a balanced budget to the General Assembly by theeighth day of the legislative session.

Over the next 11 weeks, the legislature will review, hold hearings on and consider the budget. The legislaturesDepartment of Legislative Services will assist the Senate Budget and Taxation Committee and the HouseCommittee on Appropriations in their review. The State Constitution provides that the legislature may reducethe amounts submitted by the Governor but may not add to the budget or substitute items. The budgets ofthe legislative and judicial branches of government are exceptions. The legislature may also considersupplementary appropriations bills, which authorize spending beyond the regular budget. Supplementaryappropriation bills must contain a revenue source to support the authorized expenditures and are subject toline-item veto by the Governor.

During legislative consideration, the Governor may submit supplemental budgets. These budgets makecorrections to the original budget, include funding for items required by new legislation and emergencies, oradd items omitted from the original budget.

After the House and Senate have both acted, a conference committee of senators and delegates will meet toresolve differences. The legislature is required to enact the budget by the 83rd day of the legislative session.The State Constitution requires the budget also be balanced at this point. The budget becomes law uponpassage by both houses of the legislature. The Governors signature is not required.

Fiscal Year 2029 Budget Totals


($ in Millions) Fiscal Year 2028 Fiscal Year 2029 % ChangeGeneral funds $16,394 $17,241 5.2%Special funds $8,204 $8,623 5.1%Federal funds $8,197 $8,675 5.8%


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Total Funds $32,796 $34,538 5.3%

State General Fund Outlook Proposed Fiscal Year 2029 Budget


($ in Millions) FY 2028 FY 2029 FY 2030 FY 2031 FY 2032GF Revenues $16,555 $17,315 $18,198 $19,199 $20,332

GF Uses $16,394 $17,241 $18,017 $19,008 $20,092GF Balance $161 $88 $181 $191 $240

Revenues


($ Millions) FY 2027 FY 2028 FY 2029% Change Over

FY2028Individual income tax $7,004 $7,081 $7,286 2.9%Corporate income tax $531 $542 $683 26.1%

Sales tax $7,044 $7,213 $7,429 3.0%Lottery $752 $742 $776 4.6%Fuel tax $904 $915 $938 2.5%

Transportation Revenues $1,882 $1,910 $2,110 10.4%Higher Education Revenues $3,093 $3,322 $3,424 3.1%

Transfer from Rainy Day Fund $40 $0 $0 0.0%Advance from General Fund $182 $0 $0 0.0%Transfer from Other Funds $333 $129 $0 -100.0%

Other General & Special Funds $2,627 $3,063 $3,130 2.2%Federal Fund Revenue $8,021 $8,197 $8,675 5.8%

Total Revenues $32,413 $33,139 $34,452 4.5%

General Fund Balances &Reversions $0 -$182 $174

Total Available $32,413 $32,957 $34,626 5.0%


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Expenditures


($ Millions) FY 2027 FY 2028 FY 2029% Change

Over FY2028Health $10,460 $10,937 $11,601 6.1%

K-12 Education $6,992 $7,203 $7,486 3.9%Higher Education $4,367 $4,519 $4,665 3.2%

Transportation $3,582 $3,555 $3,756 5.7%Human Resources $1,551 $1,511 $1,585 4.9%

Public Safety $1,412 $1,378 $1,447 5.0%Legislative, Legal & Judicial $455 $471 $480 1.9%

Public Debt Service $630 $654 $667 3.9%Reserve Fund $50 $50 $100 100.0%

Other $2,930 $2,543 $2,764 8.7%Total $32,413 $32,796 $34,538 5.3%


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Fiscal Responsibility

When Governor OBrien assumed office on year ago, Maryland faced a $1.3 billion budget shortfall for fiscalyear 2028 and a shortfall of $2 billion for fiscal year 2029. One day after his inauguration, Governor OBrienpresented a balanced budget to the General Assembly which resolved a $389 million inherited deficit forfiscal year 2027 and a projected $1.3 billion deficit for fiscal year 2028. Over the next 90 days, the OBrienadministration and the Maryland General Assembly worked together to approve a balanced budget.

Because of the actions taken by the administration and the General Assembly to restore fiscal responsibilityto the state budgeting process, Maryland faces a shortfall of less than $100 million for fiscal year 2029, asmall fraction of the $2 billion deficit that was projected one year ago. Governor OBriens proposed budgetcloses this gap through targeted spending reductions and new efficiencies in the operation of stategovernment. Under the budget baseline established in the fiscal year 2029 budget proposal, the state projectsa modest surplus of $88 million for fiscal year 2029 and $686 million in cumulative surpluses through fiscalyear 2032.

Spending Prudently

The fiscal year 2029 budget proposes $230 million in spending reductions from the estimated cost of currentservices. These include savings from administrative expenses, program revisions, efficiencies and informationtechnology. However, Governor OBriens budget protects and enhances Marylands commitment to publiceducation, health care, critical social services for vulnerable populations, environmental protection and publicsafety.

In December 2027, the Governors Commission on Efficiency and Effectiveness, chaired by LieutenantGovernor Kathleen Burbank, recommended a series of steps to improve constituent services and save taxpayerdollars. The administration is reviewing these recommendations and expects to implement many of them in thecoming year while studying others for future action. Implementation of the Commissions recommendationscould save as much as $20 million in fiscal year 2029.

The budget provides $1 million in the Department of Budget and Management for audits, management

consulting, and program evaluation studies. These efforts will be geared towards reducing costs and improvingeffectiveness of state programs.

After 1.5 years with no general pay increases, Governor OBriens budget provides $64 million to implementstate employee compensation adjustments as follows: Cost of Living Adjustment (COLA) of 1.6% ($46.9million); Annual Salary Review (ASR) mainly for attorneys, and Juvenile Services direct care workers ($9.9million); and initial funding of a four-year phase-in salary increase for judges, based on the Maryland Judicial


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Compensation recommendations ($1.1 million). Governor OBriens budget for fiscal year 2029 also provides $6million for the first phase of a two-year, 8.5% pay raise for state troopers.

Last year, Governor OBrien made good on his promise to sell the State Yacht. The auction for the yachtnetted $248,000 for the state and the elimination of maintenance related expenses will save Maryland$230,000 a year.

For the first time in four years, Marylands general fund budget will be balanced without the aid of a singletransfer from special funds. Consequently, Program Open Space and Marylands transportation system willreceive full funding in fiscal year 2029. The OBrien administration will shortly submit a program to enhancetransportation revenues in order to meet Marylands future transportation infrastructure investment needs.

Modest Adjustments Increase Revenue

No new general tax increases are included in this budget. Several administrative changes and tax fairnessprovisions will provide additional revenue. These include:

$110 million from measures to prevent corporations from shielding income from taxation through Delaware

Holding Companies and similar mechanisms;

$38.6 million from requiring nonresident taxpayers to pay income tax at rates comparable to local residents;

$2.5 million from requiring financial institutions to remit unclaimed accounts at the time they report them tothe Comptroller;

$600,000 by assessing special funds for a share of administration of the Corporate Income Tax,

$13 million from allowing the current sales tax vendor discount to continue.

Reasonable fees on long-term care providers and state facilities for the developmentally disabled will generate

$20 million, the cost of which will be shared by federal funds through the Medicaid program.

Other user-fee increases will provide $5.8 million in general fund revenues, or savings in general fund spending


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Education

Elementary and Secondary Education

Governor OBriens fiscal year 2029 budget continues his commitment to full funding for Marylands public

education system, providing $7.5 billion in total funding for K-12 education, a $283 million or 3.9% increaseover fiscal year 2028. With this proposed increase, annual funding for K-12 education will have grown by nearly$500 million in the first two years of the OBrien administration.

The fiscal year 2029 funds several major initiatives to enhance the quality of education for Marylands publicschool students:

Turnaround Specialists Initiative:Governor OBrien believes that it is unacceptable for schools toconsistently fail to meet state and federal academic expectations year after year, and it is equallyunacceptable to wish the problem away and not take action. Schools that consistently fail are in desperateneed of new management and new strategies to improve performance. Governor OBriens budget provides $1million for a new Turnaround Specialists initiative to provide for the placement of management, administrativeand education professionals in fifteen of Marylands lowest-performing schools to implement proven strategiesof improving student achievement and school administration. The Turnaround Specialists Initiative willcomplement Governor OBriens Partnership for Achieving Successful Schools (PASS), which was launched inJuly and is currently helping more than 120 academically underperforming schools take steps to enhancestudent performance on Maryland School Assessment examinations.

Families in Education Initiative: The fiscal year 2029 budget provides $500,000 for a new Families inEducation Incentive Grant Program and Fund to support grants awarded on a competitive basis to publicschools, with no more than two grants awarded per district, to support innovative family and communityinvolvement programs designed to facilitate parents creation of a supportive learning environment at home andan increased involvement in school activities.

Project Success: The fiscal year 2029 budget provides $1 million to revive Project Success. Project Success

will provide a comprehensive, systematic delivery system that responds to the needs of children and theirfamilies, using the school as the hub of service delivery. There are six core components of service delivery:basic preventative health care for children and families; proper nutrition and nutrition education; preventionand rehabilitative mental health services for children and families; services that will protect children andpromote the stability of the family; substance abuse prevention, intervention and treatment for children andtheir families; and social activities to enhance positive interaction within families.


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Character Education: Teaching children valuable lessons about character and integrity ultimately reducestheir risk of engaging in illegal activities or taking up drug and substance abuse, and improves their overallacademic performance. The Governors budget provides $500,000 for a Character Education Initiative.These funds will be distributed to eight districts in the first year on a competitive basis for theimplementation of Character Education programs and initiatives.

Dropout Prevention and Intervention: Governor OBrien is proposing legislation this session to requirestudents to stay in school until they receive their diploma or reach age 18. This law should reduce substantiallythe number of students dropping out of high school each year, which currently stands at about 10,000. Thefiscal year 2029 budget supports the states dropout prevention efforts by providing $10 million for dropoutprevention and intervention programs, more than double the fiscal year 2028 appropriation.

Literacy Program: The fiscal year 2029 budget provides $15 million for the second phase of GovernorOBriens four-year commitment to place reading curriculum specialists and instruction personnel in everypublic elementary school by 2031. This program is critical to achieving Governor OBriens goal of ensuring thatall students are reading at or above grade level by the end of the third-grade.

Teacher Shortage Mitigation and Recruitment Program: In order to alleviate Marylands chronic shortage of

qualified teachers, the Governor OBriens fiscal year 2029 budget proposes to provide $15 million in targetedgrants to recruit up to 250 new teachers. These newly recruited teachers will be placed in schools where theyare most needed. This new effort will alleviate chronic teacher shortages as well as reduce class sizes toprovide for a more interactive learning experience for students.

Teen REACH: Governor OBriens Teen REACH initiative, launched last March, is promoting civic responsibility,community service and responsible choices among Marylands youth. The program is expected to provide accessto after-school programs to 6,350 disadvantaged youth in fiscal year 2028. The program is also supportingcommunity organizations that serve disadvantaged youth by providing them with opportunities to serve theircommunities and enrich their lives. The fiscal year 2029 budget increases funding for the after-schoolcomponent of Teen REACH to $15 million, increasing the number of youth enrolled in after-school programsthrough Teen REACH to over 9,500. In total, $25 million is provided for Teen REACH in fiscal year 2029, a

$10 million increase over fiscal year 2028.

School Construction: Last year, the Kopp Commission reported that the State needs to invest a minimum of$550 million annually to meet school construction and expansion demands. Governor OBriens fiscal year 2029budget takes a significant step forward in implementing the Kopp Commissions recommendations by providing$474.1 million in general and capital funds for school construction, a $66 million increase over fiscal year 2028.Governor OBrien will work with the General Assembly to develop a feasible means of fulfilling the KoppCommissions funding recommendations.

Higher Education

The fiscal year 2029 budget increases general fund support for higher education by 2.2% to $960.5 million,

which should mitigate the need for large tuition increases for Marylands college students. The overall highereducation budget totals $4.7 billion, a $146 million or 3.2% increase over fiscal year 2028.

Governor OBrien is committed to improving and upgrading facilities at the States higher educationinstitutions. To this end, Governor OBriens capital budget includes $181.9 million for construction atMarylands public colleges and universities. Major projects include: $56 million for University of MarylandCollege Parks new Biological Sciences Research building, $19 million for University of Maryland BaltimoresDental School, $18.6 million for St. Marys College of Marylands new academic building and $17.5 million forBowie State Universitys new Center for Business and Graduate Studies. $38.9 million is provided for capital


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projects at Marylands community college and $8.1 million is allocated to support the expansion of MontgomeryColleges Takoma Park Campus.

Funding for student financial aid increases $10.6 million, or 12.9%, to $93.1 million. The Educational ExcellenceAwards (EEA) program, the States primary need-based award program, and the Part-Time Grant program total$67.7 million in fiscal year 2029, an 11.3% increase over fiscal year 2028. The allowance also includes an

additional $1 million for the Loan Assistance Repayment Program for teachers and nurses.

Governor OBriens budget proposes $3 million to fund Scholarships for Academic Achievement, a new merit-based program to award 5,000 scholarships each year to Marylands top students who attend a college oruniversity in the state. The top 1,000 students would receive $1,000 a year for four years, while 4,000academically-talented students would receive $500 a year for four years. Scholarships will be allocated tocounties and high schools throughout the state based on the number of high school graduates compared to thestatewide total.

Direct aid to community colleges, excluding fringe benefits, totals $208.1 million, an increase of 2.7% in fiscalyear 2029. In addition, aid to community colleges fringe benefits totals $25.3 million.

Historically Black Colleges and UniversitiesDespite the tight fiscal picture, the fiscal year 2029 allowance includes a total of $12 million for theHistorically Black Colleges and Universities (HBCUs) broken down as $6 million for Access and Success grantsand $6 million for HBCU Enhancement grants. These grants are designed to meet HBCU special needs bydeveloping and implementing best practices as well as supporting the debt service on planned capital projects,especially at Coppin State College. In addition, MHECs pass-thru grants include $500,000 for implementingsome of the more pressing recommendations of the Toll Report on the revitalization of Coppin and itssurrounding area.

Adult Education

The fiscal year 2029 builds upon last years investment to equalize Marylands funding for adult educationprograms with the national average. In fiscal year 2027, for example, Maryland devoted just $77 in state

spending per pupil for adult education services. By comparison, New Jersey spent over $450 per pupil. Thefiscal year 2028 enacted budget increased state per-pupil spending to $122 and expanded adult educationservices to 2,000 additional Marylanders. Governor OBriens fiscal year 2029 proposal increases per-pupilfunding to a record $322 and expands service to 2,300 more individuals, bringing the total number ofMarylanders served by state-supported adult education programs to 23,300. Governor OBriens fiscal year2029 budget increases overall funding for adult education by nearly 40% to $15 million.


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Health & the Environment

HealthGovernor OBrien is determined to improve healthcare access for Marylanders, especially those with limitedaccess to health insurance. The fiscal year 2029 budget builds upon Governor OBriens commitment to meeting

Marylands health care needs by providing $11.6 billion, a 6.1% increase, for health programs.

Medicaid and the Maryland Childrens Health Program

Last year, in spite of the austere fiscal picture, Governor OBrien and the General Assembly provided $7million in new funding for childrens health insurance coverage, allowing 5,000 additional children to receiveinsurance through the Maryland Childrens Health Program (MCHP). At the same time, the enacted fiscal year2028 budget protected health care services for the 1 million Marylanders who rely on Medicaid as their soulsource for health care coverage.

The fiscal year 2029 allowance provides $9 billion, a $517 million increase, for Medicaid. This increase willmeet current program costs while expanding coverage to nearly 19,000 additional beneficiaries. $410.1 millionis provided for the Maryland Childrens Health Program (MCHP). This allowance will expand health insurancecoverage to nearly 8,000 additional children, bringing the total number of additional uninsured children servedby MCHP since Governor OBrien took office to more than 13,000.

Additionally, the Department of Health and Mental Hygiene will introduce several new management initiativesto achieve significant savings: $2.6 million by enrolling more developmentally disabled individuals in Medicaid;$2.4 million by updating Medicaid eligibility records more frequently; $5 million by changing the manner inwhich services are provided for children in the Rare and Expensive Case Management program (over a two-yearperiod).

Substance Abuse Treatment

The budget contains $157.2 million for alcohol and drug abuse treatment, a $7.2 million (4.8%) increase overfiscal year 2028, including $4 million to fund Governor OBriens initiative for residential treatment in lieu ofincarceration for adult and adolescent criminal justice clients. Increased treatment beds will serve an

additional 310 adolescents and 98 adults annually. With this funding increase, total funding for alcohol anddrug abuse treatment services will have grown by more than 20% in just the first two years of the OBrienadministration, with an additional 13,500 Marylanders receiving treatment on an annual basis.

Mental Health Services

The community services budget includes an increase of $24.7 million in fiscal year 2029, bringing total fundingto $530 million. With this increase, funding for community mental health services will have grown by 17% inthe first two years of the OBrien administration.


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The fiscal year 2029 budget reflects consolidation of the largest residential psychiatric facilities by movingpatients and staff from Crownsville Hospital Center to Spring Grove Hospital and Springfield Hospital, saving$12 million in operating funds. The Carter Center will also become part of the University of Maryland MedicalSystem (UMMS). The transfer of Carter Center employees to UMMS and the closure of Crownsville will freeup 267 State-funded positions by the end of fiscal year 2029.

Developmental Disabilities Services

Funding for community services for Marylanders with developmental disabilities increases by $55.1 million, or11.8%, to $521.9 million. This increase includes $17.8 million to boost salaries paid to direct care staff ofcommunity providers and $25.6 million to expand community services. More than 17,390 developmentallydisabled individuals will receive community-based services in 2029, including 1,200 individuals who have been onthe waiting list for more than one year.

New Focus on Disability Services

During the 2028 legislative session, Governor OBrien will introduce legislation to create a new Department ofDisabilities. Close to $1 million in additional funding is added to the budget to create the new department,elevating the States capacity to address the needs of the disability community in Maryland.

Healthy Start for Infants

In order to provide a healthy start for children born in Maryland, Governor OBrien proposes to place arenewed emphasis on preventative measures that will ensure that children will enjoy happy, healthy lives. TheCenters for Disease Control and Prevention (CDC) recommends that women of childbearing age take specifiedvitamin supplements in order to reduce the risks of children being born with neurological defects. TheGovernor proposes the creation of a $2.8 million Prenatal Dietary Supplement Program. The program proposedby the Governor will distribute prenatal multivitamins and mineral dietary supplements containing therecommended level of folic acid to women of childbearing age (15-45) who qualify for the federal SpecialSupplemental Nutrition Program for Women, Infants and Children (WIC). Local health departments mustdistribute the supplements and provide counseling and written information regarding the proper use of thesupplements.

HIV/AIDS

Governor OBriens fiscal year 2029 budget provides $54.1 million for HIV/AIDS, an increase of more than$5.6 million or 11.5% over fiscal year 2028 funding levels. This increased funding will expand the provision ofquality health care and support services for Marylanders diagnosed with HIV/AIDS.

Environmental Efforts

Governor OBrien will focus his administrations environmental efforts on three areas to restore the health ofthe Chesapeake Bay: oyster restoration; Bay grasses; and nutrient reduction. Governor OBrien will continue hisefforts to increase federal funding for these restoration projects while seeking new sources of revenue herein Maryland.

Governor OBrien continues to support recovery of native oyster populations with more than $6 million inprojects. These actions will provide much needed filtration of Bay waters and support local oyster industries.In addition to supplementing populations of native oysters, the State is also studying a disease-resistant, non-native oyster to evaluate the benefits and risks of its possible introduction into Bay waters.

The fiscal year 2029 budget contains over $600,000 in federal funds to support Governor OBriens goal ofplanting 1,000 acres of bay grasses by 2035. With cooperation from federal partners, DNR can study large-scale bay grass restoration techniques in the Lower Potomac and Patuxent Rivers.


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Governor OBrien is focusing his nutrient reduction programs in three areas: land preservation, cover crops,and upgrading waste water treatment plants. The fiscal year 2029 fully funds Program Open Space, RuralLegacy and other land preservation programs at $132.8 million, the first time in five years that theseprograms have received full funding. $24 million is budgeted for the Maryland Agricultural Land PreservationProgram.

To reduce nutrient runoff from farms, Governor OBrien has increased funding for cover crops to $1.9 millionand has continued to fund cost sharing of capital improvements to farms at $6.0 million.

The budget allowance for fiscal year 2029 provides $79.2 million for drinking water and wastewaterinfrastructure improvements. This investment will significantly reduce the largest source of pollution to theBay.

Last year, Governor OBrien and the General Assembly worked to enact major reform of Marylandsbrownfields programs and increased annual capital funding for brownfield cleanup and remediation from$500,000 to $7 million. The fiscal year 2029 budget provides $10 million, a $3 million increase, for brownfieldprojects. It is estimated that this investment will support over 140 cleanup and mitigation projects statewide.

To complement these efforts, Governor OBrien will introduce legislation providing the Maryland Departmentof the Environment with greater enforcement power over contaminated properties around the State. GovernorOBrien will also submit an Administration bill to encourage more voluntary brownfield cleanups by developersand property owners.


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Public Safety & Safer Neighborhoods

Governor OBrien remains firmly committed to making Maryland communities safe. The first step is morecomprehensive criminal prevention programs, the guarantee for a fair and speedy adjudication system, andeffective punishment and rehabilitation in all Maryland correctional facilities. Through fair and diligent lawenforcement, and through the presence of effective discipline and treatment within our juvenile and adultdetention facilities, the fiscal year 2029 budget recognizes the States duty to protect its citizens byproviding $1.45 billion, a 5.0% increase, for public safety programs.

State Police Efforts

Governor OBrien will provide Marylands uniformed officers with the funding, training and protection theyneed to properly enforce Marylands laws and preserve the privacy of its law abiding citizens.

The newly created Homeland Security and Intelligence Bureau with the Department of State Police providescoordinated criminal enforcement under a single command structure to reduce bureaucracy and increaseeffectiveness and efficiency. The Bureau operates 24 hours a day, 7 days a week and has partnered lawenforcement agencies and private and public organizations in order to reduce crime and minimize the threat ofpotential terrorist attacks.

The Vehicle Theft Prevention Council in the Department of State Police has also implemented 36 initiatives to

reduce vehicle theft in high vehicle theft areas.

The Maryland Fire Prevention Commission and Fire Marshal helps to free communities from the crime of arson.The Fire Prevention Commission and Fire Marshal provide $10 million annually to counties, Baltimore City,municipal corporations, and local fire rescue and/or ambulance companies through the Senator William H.Amoss Fund. The budget also includes an additional $350,000 and four new positions for the bomb squad.

Governor OBriens budget for fiscal year 2029 also provides $6 million for the first phase of a two-year, 8.5%pay raise for state troopers, while including funding to hire 62 additional State Police officers.

Effective Juvenile Services

The fiscal year 2029 budget will provide increased funding for the Department of Juvenile Services to

implement Governor OBriens vision of comprehensive and results-based solutions to the problem of juvenilecrime.

The Department of Juvenile Services will expand mental health and substance abuse services to youth incustody so that comprehensive plans, appropriate to each youth, can be implemented to treat the factors ineach young persons life that induce them to criminal activity. Implementation of these plans will be monitoredand modified as necessary to ensure that the desired results are achieved. To this end, the budget includes$7.3 million to provide services such as mental health and substance abuse counseling and to help localsubdivisions implement drug court initiatives.


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The fiscal year 2029 budget also includes a number of new detention alternatives, designed to move youthsaway from secure detention facilities and into more effective and less costly community-based programming.An additional $1.4 million is provided in the 2029 budget for the department to initiate a day and eveningreporting center in Baltimore City and an evening reporting center in Prince Georges County. The two newcenters will enable youths to remain in the community and receive education and other services while awaiting

their trials.

The Department of Juvenile Services is responsible for the care and custody of youth in its State operatedand contractual operated facilities. The budget for Residential Operations totals $79.4 million for 2029, anincrease of 5.1% over the 2028 appropriation. The increase is largely due to the recent opening of three newdetention facilities that will help relieve pressure from other facilities and provide for improved livingconditions and enhanced treatment services for youths.

Access to Justice

The administration is committed to ensuring that all citizens, regardless of race, gender, creed, sexualorientation or income, have access to a fair trial through legal representation. The operating budget for theOffice of the Public Defender (OPD) increases $2.4 million over the 2028 appropriation, primarily reflecting

the addition of 68.5 new positions that will provide critical relief for attorneys with excessive caseloads. Theallowance enables OPD to provide effective counsel to all indigent adult and juvenile defendants statewide. Thefiscal year 2029 budget also provides a two-grade salary increase for public defenders to provide pay parity.

Community Policing

Governor OBriens budget provides $13 million for a new Community Policing grant program to assist countyand city law enforcement offices in hiring 216 new police officers. These new officers will embrace communitypolicing-oriented law enforcement strategies and adopt a results-oriented approach to combating crime thatstresses innovative, localized strategies. A stronger police presence in Marylands high-crime communities willensure the success of the various steps that the administration is taking, in cooperation with county and locallaw enforcement groups, to combat crime and violence in Marylands communities.

Strengthened Oversight of ParoleesThe fiscal year 2029 supports Operation Spotlight, which we launched last year, by adding $3.7 million infunding to support field operations within the Division of Parole and Probation. This investment will help theDivision add 32 new parole agents, seven supervisors, and six casework supervisors who will help parolees findemployment and other services.

Keeping the Public Safe

The adult population of Maryland State correctional institutions continues to grow to an average projection of28,350 in fiscal 2029. Governor OBrien maintains funding for the operation of Marylands correctionalinstitutions.

Last year, more than 15,000 inmates were released from Maryland prisons and returned to their home

communities. With no changes to the current correctional system, it would be expected that more than halfwould eventually be convicted for new crimes. To counteract this situation, Governor OBrien is committed todeveloping new forms of treatment services for inmates to instill a sense of renewed community belonging andaccomplishment upon release. Project RESTART (Reentry, Enforcement and Services Targeting Addiction,Rehabilitation and Treatment), a $9.2 million initiative, will support the expansion of treatment andrehabilitation services to adults currently in Maryland correctional facilities.

Providing inmates with drug treatment and job training will return inmates to their homes equipped to becomeproductive members of society, which will then result in saving lives and safer communities. The program adds


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9,800 new treatment slots and will create approximately 200 new positions over the next three years toprovide for the counseling of inmates.

Governor OBrien has proposed $5 million for Collaborative Supervision and Focused Enforcement (CSAFE), tosupport the public safety needs of crime-ridden jurisdictions. A partnership of far-reaching public safetyagents that include policing, juvenile outreach, probation and treatment services will assist vulnerable

communities. The integration of these services into a unified law enforcement tool will strengthen Marylandsefforts to reduce recidivism and violent crime in these areas. CSAFE, by design, will also grant communitiesthe freedom to rearrange their resources and information sharing assets to better adapt to an ever-changingcriminal environment.

Governor OBriens budget proposes $8.5 million for substance abuse treatment. Included is a $1.9 millionsubstance abuse initiative, in cooperation with the Department of Health and Mental Hygiene, to providesubstance abuse peer counseling to inmates.


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Commerce

The OBrien-Burbank administration embraces sensible, productive, professional relations between governmentand businesses; sound physical infrastructure including transportation and technology; and using the Statesresources to leverage private investment and help the economy remain strong.

Helping Businesses Grow and Make Jobs

The budget includes $113.2 million in operating and capital funding for business development programs in theDepartment of Business and Economic Development, an $11.4 million increase over fiscal year 2028 an a $36million increase over fiscal year 2027. These programs are focused on assisting small and minority businessesand in promoting technology-based businesses and other fields of strength for Maryland.

Invigorating Communities

The capital budget includes $31.1 million for community revitalization projects. These include Baltimore CityWest Side redevelopment, a new biotechnology park in East Baltimore, Rockville Town Center, and thestatewide Neighborhood Business Development program in the Department of Housing and CommunityDevelopment.

Rebuilding our Transportation Infrastructure

This budget begins a serious effort to restore Marylands highway infrastructure. National statistics show

that Marylands interstates are the second most congested in the nation. In order to help solve Marylandstransportation problems, Governor OBrien recognizes the need to ensure the fiscal integrity of theTransportation Trust Fund. Governor OBriens fiscal year 2029 budget does not transfer any money from theTransportation Trust Fund, the first time in five years that the fund has received full funding.

During the 2028 session, the administration will introduce an expanded financing package to move importantprojects forward and initiate others required to increase safety, reduce congestion, and to foster economicdevelopment opportunities.

The fiscal year 2029 budget provides $1.1 billion for highway construction, $291.2 million for highwaymaintenance, $14 million for highway safety and $591.2 million for counties and municipalities.

The budget includes over $219.8 million for airport and seaport operations. BWI airport and the Port ofBaltimore are both critical to Marylands economic vitality. Airport passengers are projected to increase 10%in 2029 while Port tonnage will increase modestly.

Making the Most of our History and Culture

Marylands rich history is also part of its economic future. Initiatives in several agencies take advantage ofMarylands cultural and historical resources. Tourism promotion will focus on various aspects of history-relatedtourism, including African-American history, the Civil War, and the historic National Road.


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$1 million is granted to Marylands nine Heritage Areas to encourage and coordinate heritage tourismopportunities, historic preservation efforts, and historic research, education and recreation programs.

Building on these efforts, the Maryland Higher Education Commission includes $100,000 as the first step instrengthening heritage-related higher education programs in a coordinated manner. The resulting consortium,called the Institute for Museum, Preservation, and Archaeology Research & Training (IMPART), includes

institutions of higher education, state agencies, and state museums. Academic programs involved includearcheology, architecture, museum science and history.

Funding for support of the Arts is maintained at $11.7 million. Another $1 million will be devoted to attractingtelevision and film productions into Maryland.

Encouraging Heritage-Related Development

Governor OBrien will propose extending the tax credit for renovation and restoration projects for historicproperties. These projects promote historic preservation while helping to revitalize older communities.

Building Technology Infrastructure

The budget includes $3.6 million for operating networkMaryland, Marylands digital communication backbone.

The build-out schedule for networkMaryland, is being accelerated, with a Point of Presence established inevery jurisdiction in the next 12- 15 months. Already, the University System and Johns Hopkins are using thenetwork to share extremely large research files and attract additional grant money.

Governor OBrien worked with the nine Eastern Shore counties, the Eastern Shore regional councils to addressthe need for affordable high-speed Internet access on the Eastern Shore. In October, the administrationannounced the extension of DSL broadband service to 26 Eastern Shore communities as part of a largerstrategy to extend Digital Subscribe Line (DSL) coverage in other rural areas of the State. GovernorOBrien and his administration not only brought broadband service to Marylands rural counties, but also,through negotiation, eliminated the cost penalty rural business had felt. These actions will allow rural Marylandbusinesses to receive broadband service at the same costs as urban Maryland businesses.


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Marylands Capital Budget

Governor OBriens capital budgets total approximately $3.3 billion. This includes $1.3 billion for state-ownedcapital projects, grants and loans to local governments, as well as private and non-profit sectors for projectssupporting Governor OBriens policy objectives such as restoring the Chesapeake Bay. The remaining, $2.0billion, is directed to highway projects, mass transit and other transportation improvements.

The general construction portion of Governor OBriens five-year capital improvement program focuses onimproving educational facilities, protecting the environment, augmenting public safety, strengthening andrevitalizing communities, and creating and retaining high-wage jobs.

EducationThe capital budget provides $715.5 million to construct new facilities and to improve existing facilities forMarylands elementary, secondary and post-secondary students. Of this amount, $181.9 million will fundimprovements to academic and research facilities at four-year institutions of higher education; $474.4 millionwill fund new and improved elementary and secondary school facilities; and $47.0 million will improve academicfacilities on 15 community college campuses.

Public Colleges and Universities: Funding to improve academic and research facilities at public four-yearinstitutions of higher education totals $181.9 million. Major projects include: $55.8 million to construct a newBiological Sciences Research Building at the University of Maryland, College Park; $19 million to continuefunding of a new dental school at the University of Maryland, Baltimore; $18.6 million to construct a newacademic building at St. Marys College of Maryland; and $17.6 to construct the New Center for Business andGraduate Studies at Bowie State University. The remainder of the capital budget in this area includes funds toimprove utility systems and design and equip facilities at various University System of Maryland institutions,Morgan State University, and at St. Marys College of Maryland.

Historically Black Colleges and Universities (HBCUs): Of the $181.9 million provided to the States four-yearpublic institutions of higher education, $50.3 million is provided to improve facilities at the States historicallyblack colleges and universities: Bowie State University, the University of Maryland, Eastern Shore, CoppinState College, and Morgan State University. The State will also provide an additional $62 million in capitalfunding over the next three years to complete the University System of Marylands and Maryland HigherEducation Commissions $75 million capital funding commitment to the States HBCUs.

Elementary and Secondary Education Facilities: Grants to local school systems to expand and improveeducational facilities in each of Marylands 23 countiesand Baltimore City total $474.4 million. An additional$1.1 million has been included to design improvementsto facilities at the Columbia and Frederick campuses ofthe Maryland School for the Deaf.

Community College Facilities: Governor OBrien has allocated an additional $9.2 million over planned funding toprovide a total of $58.8 million to improve academic facilities on 15 community college campuses. Major


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projects include: $14.7 million to renovate the main building on the Liberty campus of Baltimore CityCommunity College; $11.5 million to construct a new High Technology Center at Prince Georges CommunityCollege; $7.1 million to construct a new Student Services Building on the Takoma Park campus of MontgomeryCollege; and $2.8 million to construct a new Learning Resource Center at Garrett Community College. Theremainder of the capital funding for the community colleges will improve aging facilities and building systems.

Private College and University Facilities: Private colleges and universities receive $12.5 million to improveacademic and research facilities. Specifically, funding has been provided for: a new library at Columbia UnionCollege in Takoma Park; a new library storage facility for the Johns Hopkins University; a new academic andadministration building at Sojourner-Douglass College in downtown Baltimore; and a new academic building forVilla Julie College.

Health and the Environment$365.4 million of capital funding for health and environmental programs reflects Governor OBriensobjectives: improving water quality by upgrading water and wastewater infrastructure; reducing the impact ofand directing suburban growth by preserving agricultural lands, sensitive plant and wildlife habitat and openspace; restoring the Chesapeake Bay ecosystem; and improving hospitals and community health centers acrossthe State.

Hospitals and Community Health Centers: $33.9 million is provided for health-related capital projectsincluding: new and improved facilities for the University of Maryland Hospital and private hospitals; new andimproved primary care facilities in medically underserved areas through the newly created Federally QualifiedHealth Centers Grant Program; and new and improved community facilities for the care and treatment ofphysically, mentally and emotionally disabled individuals, individuals recovering from substance abuse, and theelderly.

Water and Wastewater Infrastructure: $79.2 million for the improvement of local drinking water systemsand wastewater treatment plants. These improvements will assist State agencies and local governments toensure that water quality standards are met.

Land Preservation Programs: $181.8 million, including: $132.8 million, full funding, for Program Open Space;$10 million for community parks projects; $15 million for the Rural Legacy Program; and $24.0 million for thepreservation of an estimated 10,500 acres of productive farmland through the Agricultural Land PreservationProgram.

Chesapeake Bay Restoration Programs: $34 million will reduce the amount of point and nonpoint sourcenitrogen and phosphorous runoff entering the Chesapeake Bay. Of this amount, $17 million has been providedfor the Biological Nutrient Removal Program. In addition, $6 million will be used to reduce nitrogen andphosphorous runoff from urban, suburban and agricultural lands. $6 million is provided for the AgriculturalCost Share Program to help farmers adopt nutrient management practices that reduce discharge into thewater supply and the Chesapeake Bay. The remaining $3 million will be used to restore the Bays once vibrantoyster population.

Shore Erosion Control and Waterway Access Projects: $21.6 million for waterway improvements and tocontrol shore erosion.

Brownfields: Governor OBriens capital budget provides $10 million for the redevelopment of brownfields andcleanup of hazardous waste sites, with over 140 ongoing or planned projects slated to receive funding.

Public Safety and Safer Neighborhoods


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Capital projects to improve the safety of neighborhoods consist of State and local correctional facilities, newand improved court facilities, treatment and detention facilities for at-risk youth and modern facilities for theState Police. The capital budget totals $55.8 million for the safety of Marylands neighborhoods.

State and Local Correctional Facilities: $43.7 million. Major projects include: $15.3 million for improvementsto local correctional facilities, including $10 million for the expansion of the Baltimore County Detention

Center; $8.5 million to renovate support facilities at the Brockbridge Correctional Facility in Anne ArundelCounty; and $3.3 million for the construction of a new air system at the Womens Detention Center indowntown Baltimore.

Juvenile Facilities: $3.3 million is provided to construct and renovate community facilities serving at-riskyouth.

State Police Facilities: $1.1 million to equip the new Crime Lab and the new police barrack in Easton.

Public Safety Communications System: $5.0 million is allocated to continue the development of a Statewidewireless communication system for State and local public safety agencies.

CommerceThe capital budget contains $116.3 million to improve the States economy, focusing on three objectives:business attraction and retention, revitalization of economically distressed areas, and improvements to theStates major tourist attractions.

Business Attraction and Retention Activities: $82.1 million is provided for economic development financingprograms.

Economic Revitalization Activities: The budget includes $27.0 million to revitalize economically distressedareas through the Neighborhood Business Development Program and individual grants to improve the WestSide of Baltimore City, to develop a biotechnology park in East Baltimore, and to redevelop the City ofRockvilles town center.

Improving Tourist Attractions: $6.5 million is provided to improve major tourist and cultural attractionsacross the State including the National Aquarium in Baltimore, the Maryland Science Center, the B&O RailroadMuseum, and the Baltimore Zoo.

Other Projects

The capital budget funds other important projects, including grants to local governments and non-profitorganizations for projects that will provide affordable housing and encourage homeownership; grants forimprovements to community facilities in neighborhoods throughout the State; and State governmentinfrastructure construction, maintenance and renovation projects.

Housing Programs: $48.7 million will be spent on grants and loans to local governments and non-profit

organizations for projects that will provide affordable housing and encourage homeownership. Of this amount:$17.8 million has been provided for rental housing programs; $11.6 million for homeownership programs; $14.6million for the Community Legacy Program; and $4 million to assist families in need of temporary transitionalhousing.


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General Capital Improvement Program Fiscal Year 2029($ Millions)

EDUCATION GO Bonds General & Other Funds TotalPublic Colleges & Universities $181.9 $0.0 $181.9Public School Construction $157.1 $317.0 $474.1Community Colleges $47.8 $0.0 $47.0Private Education Facilities $12.5 $0.0 $12.5

Subtotal $398.5 $317.0 $715.5

HEALTH & THE ENVIRONMENTLand Preservation $24.3 $156.8 $181.1Water and Wastewater Infrastructure $0.0 $82.2 $82.2Chesapeake Bay Restoration $26.0 $6.0 $32.0Hazardous Site Cleanup $0.0 $10.0 $10.0Waterway Improvements $0.0 $12.0 $12.0Shore Erosion Control $0.0 $1.7 $1.7Ocean City Beach Maintenance $0.0 $2.0 $2.0Critical Maintenance Projects, DNR $0.0 $3.5 $3.5State Park Improvements $3.6 $0.0 $3.6

Maryland Environmental Service $3.3 $0.0 $3.3Hospitals & Community Health Ctrs. $33.9 $0.0 $33.9Other $0.0 $0.1 $0.1Subtotal $91.1 $274.3 $365.4

PUBLIC SAFETY & LAW ENFORCEMENTPublic Safety & Corrections $43.7 $0.0 $43.7State Police $1.1 $0.0 $1.1Juvenile Services $3.3 $0.0 $3.3Public Safety Communications $5.0 $0.0 $5.0District Courts $2.7 $0.0 $2.7Subtotal $55.8 $0.0 $55.8

COMMUNITY INVESTMENT & ECONOMIC DEVELOPMENTEconomic Development Programs $11.5 $104.8 $116.3Subtotal $11.5 $104.8 $116.3

OTHER PROJECTS AND PROGRAMSHousing $25.7 $23.0 $48.7Aging Senior Centers $2.0 $0.0 $2.0All Other Projects $31.4 $8.5 $39.9


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Subtotal $59.1 $31.5 $90.6

TOTAL $616.0 $727.6 $1,343.6

Net New General Obligation Bonds Issued: $616.0 MillionGeneral Assembly Capital Debt Affordability Limit: $675.0 Million

Totals may not add due to rounding.

Constitutional Agencies

MARYLAND GENERAL ASSEMBLYThe General Assembly is Marylands legislative authority. Its budget includes the Senate of Maryland, Houseof Delegates and their staff agencies. The Governor is not permitted to alter the General Assemblys proposedbudget.

$ thousands FY 2027 FY 2028 FY 2029

Change

FY 2028 - 2029General Funds $86,308 $87,140 $88,740 1.8%

Positions FY 2027 FY 2028 FY 2029Change

FY 2028 - 2029Authorized 730.0 730.0 730.0 0.0

JUDICIARY OF MARYLANDThe Judiciary of Maryland consists of the Court of Appeals, Court of Special Appeals, District Court Systemand judicial support functions. Circuit Court judges salaries are included in this budget, but other Circuit Courtcosts are local expenses. The Governor is not permitted to alter the Judiciarys proposed budget. Included inthe Department of Budget and Managements budget is $1 million to implement the first year of a four-year,

phased-in salary increase for judges recommended by the Maryland Judicial Compensation Commission.

$ thousands FY 2027 FY 2028 FY 2029Change

FY 2028 - 2029General Funds $272,789 $284,723 $280,928 -1.3%Special Funds $15,333 $15,498 $23,333 50.6%Federal Funds $1,819 $1,915 $2,077 8.5%

Total $289,941 $302,136 $306,338 1.4%


FY 2028 -2029Authorized 3,223.8 3,241.8 3,243.8 2.0

Contractual 390.0 372.0 371.0 -1.0Total 3,613.8 3,613.8 3,614.8 1.0

OFFICE OF THE GOVERNORThe Office of the Governor includes the Governor, Lieutenant Governor and their immediate staff.


FY 2028 - 2029

General Funds $8,829 $7,152 $7,139 -0.2%


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FY 2028 -2029Authorized 84.5 75.0 73.0 -2.0Contractual 3.5 3.5 3.5 0.0

Total 88.0 78.5 76.5 -2.0


SECRETARY OF STATEThe Secretary of State has numerous duties specified by the state constitution and state law. For example,the Secretary of State is responsible for registering charities, supervising the Division of State Documentsand processing criminal extraditions.


FY 2028 2029General Funds $2,684 $2,461 $2,436 -1.0%Special Funds $479 $495 $486 -1.8%

Total $3,163 $2,956 $2,922 -1.2%


FY 2028 -2029Authorized 37.6 34.6 34.6 0.0Contractual 2.1 2.6 1.4 -1.2

Total 39.7 37.2 36.0 -1.2

COMPTROLLER OF THE TREASURYThe Comptroller is a constitutional officer independently elected by the people. The office of the Comptrollercollects the states major revenues, keeps its financial accounts, manages its principal data center and providesgeneral supervision of fiscal affairs. Seventeen new positions to increase audit and collection efforts will

generate over $3 million in new revenue.


FY 2028 2029General Funds $70,398 $67,921 $67,088 -1.2%Special Funds $12,601 $12,666 $12,763 0.8%

Total $79,408 $77,024 $76,301 -0.9%


FY 2028 2029Authorized 1,125.7 1,103.2 1,120.2 17.0Contractual 28.6 25.4 29.9 4.5

Total 1,154.3 1,144.6 1,150.1 21.5

STATE TREASURERThe Treasurer is a constitutional officer appointed by the General Assembly. The Treasurers Office receivesand deposits funds, manages the states investments, manages issuance of state bonds and administers thestates commercial and self-insurance programs.


FY 2028 2029General Funds $3,860 $3,753 $3,691 -1.7%Special Funds $615 $619 $621 0.3%


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Total $4,475 $4,372 $4,312 -1.4%


FY 2028 2029Authorized 53.0 53.0 52.0 -1.0Contractual 0.0 0.0 0.0 0.0

Total 53.0 53.0 52.0 -1.0


ATTORNEY GENERALThe Attorney General is a constitutional officer independently elected by the people. The office of theAttorney General provides legal assistance to all state agencies, represents the state in legal actions, andenforces state antitrust, consumer protection and securities laws. Additional funding will enhance enforcementof laws covering securities fraud and Medicaid abuse.


FY 2028 - 2029

General Funds $18,170 $17,855 $17,459 -2.2%Special Funds $979 $602 $1,411 134.4%Federal Funds $1,399 $1,428 $1,553 8.8%

Total $20,548 $19,885 $20,423 2.7%


FY 2028 -2029Authorized 247.5 245.0 242.5 -2.5


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Department of Agriculture

Mission: To provide leadership and support to agriculture and the citizens of Maryland by conducting

regulatory, service and educational activities that assure consumer confidence, protect the environment and

promote agriculture.

The fiscal year 2029 budget allowance for the Department of Agriculture totals $73.3 million, an increase of$2.8 million or 3.9% over the fiscal year 2028 appropriation. The budget provides for the elimination of 11vacant positions within the Department. The allowance for MDA continues Marylands commitment tomaintaining and enhancing preservation of adequate productive farmland, stewardship and resourceconservation, maintaining animal and plant resources, providing consumer protection, and promoting the saleand use of agricultural products.

The allowance includes $24.0 million in general, special and capital funds for the Maryland Agricultural LandPreservation Foundation to promote the preservation of agricultural land and the incorporation of bestmanagement practices. These activities are supported by a variety of funds including property tax transfers,agricultural tax transfers, and federal farmland protection funding.

$14.1 million is allocated for the Office of Resource Conservation. This allowance includes a $500,000enhancement for the Cover Crop Project. Cover Crops provide assistance to the agricultural community by

preserving the viability of agricultural land over the winter and are an effective method for reducing the flowof nutrients into the Chesapeake Bay.

MDA provides both regulatory and promotional support for the horse industry in Maryland. Maryland has over87,000 equine on over 685,000 acres. Proceeds from horse racing pari-mutuel activities provide $1.4 million tosupport agricultural fairs statewide.

A fiscal year 2028 deficiency appropriation of $700,000 is being provided for mosquito control in order toprotect the public health of Marylands citizens.

The fiscal year 2029 allowance provides funding to hire 10 additional meat inspectors over the next two yearsand three additional veterinarians, including two supervisory veterinarians and one additional Customer Safety

Officer.

Consistent with Governor OBriens commitment to ensuring the safety and reliability of Marylands foodsupply, the fiscal year 2029 budget will increase feed inspections and sampling by doubling the number ofinspections at the 16 feed facilities that regularly handle ruminant protein and by tripling sampling at theremaining 20 feed retail outlets to ensure manufacturer compliance and product safety.

The fiscal year 2029 also continues the administrations efforts to achieve budgetary savings by reducing oreliminating nonessential items. The fiscal year 2029 budget eliminates funding for the removal of submerged


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aquatic vegetation from the Potomac River and eliminates state matching funds for the equine breedersprogram. These measures will save over $100,000 in fiscal year 2029. Additionally, Governor OBriens budgeteliminates state funding for the Wine Promotion Program and the Plant Pest Detection Program, saving$160,000.

BUDGET: $73.3 MILLIONPOSITIONS: 469.8 LESS THAN 1% OF THE STATE BUDGET

THREE YEAR SUMMARY FY27Actual

FY 28Approp.

FY 29Allowance

ChangeFY28-29

APPROPRIATIONS: (in millions of dollars)General Funds $31.6 $27.0 $27.0 0.1%Special Funds $35.3 $35.5 $39.1 10.0%

Federal Funds $2.4 $8.0 $7.2 -10.2%Total $69.3 $70.5 $73.3 3.9%

EXPENDITURES: (in millions of dollars)Office of the Secretary $33.0 $32.7 $35.8 9.3%Office of Marketing, Animal Industries &Consumer Services $11.1 $13.9 $12.5 -9.8%Office of Plant Industries and PestManagement $10.7 $10.4 $10.8 4.2%Office of Resource Conservation $14.5 $13.5 $14.1 4.9%Total $69.3 $70.5 $73.3 3.9%

POSITIONS:Authorized 460.0 429.0 429.0 0.0Contractual 45.5 50.7 40.8 -9.9Total 505.5 479.7 469.8 -9.9

PERFORMANCE MEASURES FY 2027Actual

FY 2028Estimated

FY 2029Projected

Agricultural Land Preservation FoundationDistrict Acreage 403,220 415,000 425,500

Easement Acreage 232,897 237,202 253,912

Nutrient Management Plans acreage filedwith MDA 550,000 675,000 800,000

Gypsy Moths acres treated 23,053 21,015 22,000


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Mosquito Control acres treated withbiological insecticide 95,355 75,000 75,000

Maryland Seafood Sales ($ millions) 277 282 287


Department of Budget and Management

Mission: The Department of Budget and Management helps the Governor, State agencies and their employees

provide effective, efficient and fiscally sound government to the citizens of Maryland. We support agency

efforts to achieve results by helping them obtain the fiscal, capital, personnel and information technology

resources needed to provide services to Maryland citizens. We are dedicated to providing advice and

assistance with professionalism, state of the art technology, modern management techniques and teamwork.

The Department of Budget and Managements budget totals $103.1 million, including $46.9 million forstatewide employee salary increases. The operating budget for DBM totals $51 million, a 14.3% reduction fromthe fiscal year 2028 appropriation. This reduction in operating expenditures reflects the transfer orconsolidation of DBM functions, the elimination of 19 vacant positions, reductions in information technologycosts and implementation of several management reforms recommended by the Governors Commission onEfficiency and Effectiveness.

The allowance provides $37.0 million for oversight and coordination of state information technology projects,FMIS accounting system support and telecommunications operations.

$9.7 million is budgeted to manage and administer the States personnel system, employee benefit programsand to coordinate employee development and training.

One of Governor OBriens priorities is a salary increase for state employees; after 1.5 years with no generalpay increases, this budget provides $57.9 million to implement State employee compensation adjustments asfollows: Cost of Living Adjustment (COLA) of 1.6% ($46.9 million); Annual Salary Review (ASR) mainly forattorneys, and juvenile services direct care workers ($9.9 million); and initial funding of a four-year phased-insalary increase for judges based on the Maryland Judicial Compensation recommendations ($1.1 million includesoffices of the Public Defender and State Prosecutor). The Departments budget includes $46.9 million forstate-wide COLAs for state employees; the other salary enhancements are reflected in other departmentaland agency budgets.

The allowance includes $1.0 million to provide technical assistance to agencies that create opportunities toincrease revenues and/or reduce costs.

The Departments fiscal year 2029 general fund budget, excluding statewide costs, reflects a reduction ofmore than 16% from fiscal year 2028 funding levels. These savings have been achieved by managementimprovement initiatives within DBM.

Special funds of $15.7 million for the Central Collection Unit are included to support costs of the collection ofapplicable delinquent debts of the State and administration of the Telecommunications Access for Marylandprogram that provides telecommunication relay service for hearing and speech impaired citizens.


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BUDGET: $103.3 MILLIONPOSITIONS: 480.7 LESS THAN 1% OF THE STATE BUDGET

THREE YEAR SUMMARY FY27Actual

FY 28Approp.

FY 29Allowance

ChangeFY28-29

APPROPRIATIONS: (in millions of dollars