Remarks as prepared
Delivered on Wednesday, January 15, 2025
Today, we are releasing our proposal to balance the state budget.
Two storms are swirling around the state. And our budget responds to both.
The first storm is a fiscal crisis nearly a decade in the making.
Under the former administration, state spending in the General Fund Budget increased by 70% in the seven years before I took office.
At the same time, our economic growth stalled. We were spending, but we weren’t growing.
Emergency COVID money from the federal government papered over a structural deficit that had been warned by experts since 2017.
NOW, we face the worst fiscal crisis in at least 20 years.
This challenge is even worse than the fiscal crisis of the Great Recession.
The second storm is a stark new policy direction from the Trump-Vance Administration that threatens to disrupt Maryland’s economy.
In partnership with the General Assembly, it is our responsibility to help the State weather these two storms and emerge stronger.
We are guided by a single, clear principle:
Build an economy that grows the middle class – and gives everyone a pathway to work, wages and wealth.
Four priorities are at the center of that mission:
First: Grow the economy.
Second: Strengthen the labor force.
Third: Modernize government.
And fourth: Fix what’s broken in our tax system.
This morning, I will give an overview of WHY these priorities matter and HOW we plan to address them.
First: We need to grow our economy.
From 2017 to 2022, the national economy grew by 11%. But Maryland’s economy grew by just 3%.
And that lack of growth has real consequences for our state and our people.
If our economy had been growing more rapidly, we wouldn’t be dealing with this kind of historic budget crisis.
If our economy had been growing more rapidly, we could better withstand changes in Washington.
Economic growth must be our north star…
It’s at the center of every opportunity we hope for.
It’s the key to every challenge we need to overcome.
Yesterday, I unveiled our Economic Agenda.
We are channeling $750 million toward economic growth this year.
I have proposed $128 million in new targeted and strategic investments toward specific areas that will strengthen our competitiveness – like cyber, quantum, and life sciences.
Our new investments will drive $515 million in economic activity in Maryland and support, create, or retain 2,600 jobs.
And our economic strategy is broader than simply addressing one industry or one sector.
Because you can’t have growth without safe communities…
You can’t have growth without affordable housing…
You can’t have growth without all of the key elements that make Maryland a place where people want to live, work, and thrive.
We need to take a holistic approach to growth.
That is why our agenda preserves record funding for local law enforcement…
That is why we are supporting programs to turn more renters into home-owners…
And that is why we will continue to invest in priorities that make Maryland safer, more affordable, and more competitive for all.
Anyone who suggests we can just cut our way to prosperity isn’t being honest.
Anyone who suggests we can just tax our way to prosperity isn’t being honest either.
We need to grow.
Second: We need to strengthen the labor force.
When we took office, the pipeline between Marylanders and opportunity was broken.
It isn’t enough to create jobs if you aren’t also training Marylanders to fill those jobs!
NOW is the time for us to equip Marylanders with the skills they need to compete not only for the jobs of now – but also for the jobs of the future.
We have preserved record funding for K-12 schools, to ensure Maryland has the best education system in the country and we are teaching our students how to be both employees and employers.
And look: I know we have some of the best four-year institutions in the nation – But we need to end the myth that every single Marylander must attend one in order to be successful.
We are making strategic investments in apprenticeships and job training.
We are building new pipelines to industries of the future, like cyber and biotech.
At the same time, we will continue our strong support for child care – so Maryland parents can hold a job while knowing their child is safe at home.
Our labor force strategy prioritizes our greatest source of strength: And that’s Marylanders.
Third: We need to modernize government.
When we took office, we realized that many structural challenges had gone unaddressed for a long time.
Different agencies were paying different amounts of money for the same IT equipment and software.
Hundreds of state cars were being serviced and maintained – but not being driven anywhere.
When simple problems go unexamined and unaddressed, that burden falls on taxpayers.
We won’t accept that.
Last week, I announced a new Government Modernization Initiative to help us find ways to save taxpayers money.
This push will save us a projected $50 million this year alone. And this new push is the cornerstone of our vision for a government that is more efficient.
In addition, we will slow the implementation of certain mandated priorities to ensure all state programs are effective and sustainable.
We also need to make difficult cuts where necessary, rein-in spending, and tighten our belts.
We propose $2 billion in total cuts this year. And we have taken a narrow, targeted approach that focuses on boosting efficiency and delivering results.
Fourth: We need to fix what’s broken in our tax system – Because you cannot look at Maryland’s tax system and honestly say it works as well as it could!
It is complex.
It is confusing.
It is often deeply unfair for the average Marylander.
We cannot work with the same broken machinery and deliver different results.
This year, we have put forward a commonsense package for tax reform that will make taxes simpler, fairer, and pro-growth.
For the third year in a row, we will not raise the sales tax or the property tax…
We are closing corporate tax loopholes to help lower the overall corporate tax rate to make Maryland more business-friendly…
Nearly two-thirds of Marylanders will receive a tax cut.
In fact, eighty-two percent of Marylanders will see either a tax cut or no change in their taxes at all.
And Marylanders who have done exceptionally well financially will contribute a little more so we can make targeted investments in economic growth, public safety, and education.
We refuse to balance the budget on the backs of middle-class families.
We ALSO feel an obligation to make strong investments in the programs and services that Marylanders care about most.
I reject the false choice that says tax reform either drives growth or limits it –
Our plan makes Maryland the best state in the nation to start and grow a business – while ALSO ensuring we can make responsible investments.
Simpler. Fairer. And pro-growth… That is our vision for commonsense tax reform.
These are the four big steps we are taking in partnership…
First: Grow the economy.
Second: Strengthen the labor force.
Third: Modernize government.
Fourth: Fix what’s broken in our tax system.
And I want to emphasize: We enter this moment not from a position of weakness, but from a position of strength.
In partnership with the General Assembly, we have passed two consecutive General Fund Budgets that are smaller than that of the previous year –
That is something that hasn’t happened in nearly a decade!
We have kept the Rainy Day Fund at a higher level than is required by law during BOTH of our first two years in office –
And we are doing it again this year.
At the same time, we have made critical investments in our people and our future.
With our state and local partners, we broke the back of violent crime.
We’ve created more than 60,000 new jobs and seen unemployment drop to one of the lowest rates in the country for fourteen months and counting.
We’ve delivered historic funding for K-12 schools, advanced key priorities laid out in the Blueprint, and focused on the fundamentals of reading and math.
Every step of the way, we’ve moved in partnership – across parties and across all parts of the state.
Nowhere has that partnership been clearer than in our collective response to the collapse of the Francis Scott Key Bridge.
Maryland has already done big things...
And we are ready to do big things again.
Together, we are proving what it looks like to craft balanced budgets that are bold and sustainable;
And I know if we continue moving in partnership, we will emerge from each of these two storms stronger than ever.
[...]
We will take questions from the press in a moment.
But first, I want to end by speaking directly to Marylanders:
I’ve had the honor of traveling across the state over the last two years as your governor.
We’ve clocked tens of thousands of miles on the road –
We’ve clocked hundreds of hours in town halls, coffee shops, and backyard barbecues…
You’ve invited us into your homes…
Your union halls…
Your libraries…
And your schools.
You’ve told me about your concerns…
How prices are too high.
How you’re thinking about moving away so you can afford to buy a home.
How opportunity still feels out of reach.
I want you to know that I hear you – and your words and your wisdom have been with me in every moment of this budget process.
Not everyone will agree with our proposal.
But even if our views conflict, I will always be direct with you about why we believe this is the best option for our children, workers and families.
We are in a moment of challenge. But we will win. Because that’s what Maryland does.