The One Line Item That Can’t Be Cut by Memo

By Michael Phillips | MDBayNews

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Two dozen Maryland cabinet agencies got a memo this month telling them to model what it would look like to cut their budgets by 10%. It was a request every executive-branch agency and state university got in some form; most were asked to plan around 3% reductions, and the toughest cases were asked for 10%. But no memo can touch the single biggest thing driving the shortfall those cuts are meant to close.

That’s the Blueprint for Maryland’s Future, the state’s decade-long K-12 overhaul. Fiscal 2028 is the first year the program’s cost outruns the dedicated revenue set aside to pay for it, and according to the Maryland Association of Counties, roughly $1.8 billion of the state’s nearly $3 billion projected structural gap is Blueprint’s alone. That gap doesn’t shrink after next year, either. MACo projects it growing to $2.2 billion, then $2.9 billion, then $3.3 billion by fiscal 2031.

Here’s what makes Blueprint different from everything else on the state’s books. Most of what Annapolis spends is a choice lawmakers make every year in the budget. Blueprint isn’t. It’s written into state law as a funding formula tied to enrollment and student need, and it cannot be trimmed by an agency secretary running a budget exercise. Only the General Assembly can change it, by rewriting the statute itself.

“No memo can touch the single biggest thing driving the shortfall those cuts are meant to close.”

What’s actually in the $1.8 billion

The Department of Budget and Management’s own breakdown, cited by MACo, shows what’s driving the fiscal 2028 cost across the major Blueprint categories: the Foundation Program at $474 million, Compensatory Education at $470 million, Special Education at $496 million, English Learners at $218 million, Prekindergarten at $284 million, the Concentration of Poverty School Grant at $696 million, Teacher Salaries at $36 million, and College and Career Readiness at $37 million. Those figures represent the scale of what each category requires that year, not a clean slice of the $1.8 billion shortfall itself, since much of that spending is already covered elsewhere. Still, the categories are hard to argue with on their face. Nobody is proposing to cut aid for kids with disabilities.

There’s a wrinkle worth knowing before anyone calls this runaway new spending, though. More than half of the $1.8 billion gap isn’t a year-over-year cost increase at all. It’s the disappearance of a state savings account that had been earmarked for education and is now depleted, after years of covering the difference between what the 2019 funding formulas predicted and what schools actually needed. The real annual growth in the ask is closer to $500 million. The other roughly $1.3 billion is the bill coming due now that the cushion Annapolis used to soften it is gone, at the same moment a first-in-the-nation digital advertising tax meant to help fund Blueprint sits tied up in litigation after the Maryland Tax Court struck it down in August.

“More than half of the $1.8 billion gap isn’t a year-over-year cost increase at all.”

A mandate the legislature already tried to touch, and mostly couldn’t

This isn’t the first time state leaders have looked at Blueprint’s cost and flinched. Facing a budget crunch last year, Gov. Wes Moore proposed pausing the phase-in of “collaborative time,” a provision guaranteeing teachers more planning periods, delaying it for four years, along with other trims to the plan. The Maryland General Assembly, controlled by his own party, largely said no. The final bill that passed in April 2025, the Excellence in Maryland Public Schools Act, delayed collaborative time, but far less than Moore wanted, preserved funding for community schools, and specifically protected per-pupil funding for students in poverty, special education and English-language classes from any cuts.

Republicans have made no secret of where they’d start if given the chance. Senate Minority Leader Stephen S. Hershey Jr., R-Upper Shore, has called Blueprint a costly “unfunded mandate” on the state and, by extension, its counties. But Hershey’s party holds a small minority in both chambers of the General Assembly, and the 2025 fight showed that even a governor from the majority party couldn’t get his own legislature to open up the formula much. That history matters heading into 2027, when lawmakers face a gap more than five times bigger than the one that produced last year’s fight.

Budget Secretary Yaakov “Jake” Weissmann underscored just how boxed in the state’s finances have become when he explained the scale of the fiscal 2028 problem earlier this month. He said that even eliminating every dollar of general-fund spending outside health, education, public safety and human services still would not close the gap. That’s not evidence education was waved off from producing its own reduction scenarios. It’s evidence that the mandatory portions of those four categories, Blueprint chief among them, are now so large that discretionary cuts confined to everything else can’t solve the state’s math on their own.

“The mandatory portions of those four categories, Blueprint chief among them, are now so large that discretionary cuts confined to everything else can’t solve the state’s math on their own.”

Counties are the ones actually absorbing the gap

While the state has largely funded Blueprint at the statutory minimum required under the 2019 formulas, according to MACo, Maryland’s counties have not had that luxury. Local governments are providing about $2.2 billion more, statewide, than the state originally estimated local costs would be, as of fiscal 2027. Nineteen of Maryland’s 24 jurisdictions contributed above their statutory requirement that year, a pattern MACo says cuts against the original assumption that most counties would eventually just pay the state’s estimate and stop there.

“Local governments are providing about $2.2 billion more, statewide, than the state originally estimated local costs would be.”

That local burden has landed as rising property taxes, new local fees and money pulled from other county services in many jurisdictions, MACo reported. The state, meanwhile, is holding its own contribution to a roughly flat statutory floor while asking counties, and the property taxpayers who fund them, to keep making up the difference.

The revenue picture improved slightly, but not enough

Maryland’s Board of Revenue Estimates raised its fiscal 2027 revenue forecast by $319.9 million on Sept. 25, largely on the strength of a fiscal 2026 closeout that beat expectations. The board also issued its first fiscal 2028 forecast, projecting $28.35 billion in ongoing general fund revenue. The board itself cautioned that the improvement mostly reflects one-time factors, not a stronger economy, and it described Maryland’s labor market as being in an ongoing “job recession,” with employment still below January 2025 levels. Federal civilian withholding collections, a significant piece of Maryland’s tax base given its federal workforce, fell 10.6% year over year in the first quarter of 2026 and 10.0% in the second.

A few numbers worth keeping in view

• Roughly $1.8 billion of Maryland’s nearly $3 billion fiscal 2028 structural gap is tied to Blueprint, growing to about $3.3 billion by fiscal 2031, per MACo.
• More than half of that $1.8 billion reflects a depleted state education savings account rather than new annual cost growth, which MACo puts closer to $500 million a year.
• Counties are providing roughly $2.2 billion more statewide than the state originally estimated local costs would be, as of fiscal 2027, with 19 of 24 jurisdictions over their statutory minimum.
• The state’s fiscal 2027 revenue forecast rose $319.9 million in September, to $27.44 billion, with the first fiscal 2028 estimate set at $28.35 billion.

“Maryland law actually does build in an off-ramp, and it hinges on a specific date.”

What to Watch

Maryland law actually does build in an off-ramp, and it hinges on a specific date. NORC, the University of Chicago research group the state hired to evaluate Blueprint, must deliver its findings to the Accountability and Implementation Board by Dec. 1. The board then has until Jan. 15, 2027, just as the legislative session opens, to tell the governor and General Assembly whether Blueprint is being implemented as intended and hitting its targets.

“Whether an oversight board created to implement Blueprint delivers the one verdict that would legally slow it down is very much worth watching.”

If the board can’t say yes, state law caps future per-pupil funding increases at the rate of inflation starting in fiscal 2028 and drops several of the Act’s additional requirements for local school systems. If the board says yes, as it largely has in earlier progress reports touting reading and math gains, the formula keeps running as written. Whether an oversight board created to implement Blueprint delivers the one verdict that would legally slow it down is very much worth watching.

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Sources: This report draws on the Maryland Association of Counties’ Conduit Street policy series, “Deep Dive: The Looming Blueprint Funding Shortfall” (Sept. 23, 2026), by Sarah Sample, and “State Revenue Forecast Ticks Up Despite Weak Growth” (Sept. 25, 2026), by Kevin Kinnally; MDBayNews’s own Sept. 14, 2026 reporting, “Moore Administration Orders Two Dozen Agencies to Model 10% Budget Cuts as Deficit Deepens,” which drew on original reporting by Bryan P. Sears of Maryland Matters and on-the-record comments from Budget Secretary Yaakov “Jake” Weissmann; Danielle J. Brown, Maryland Matters, “With another budget deficit in Maryland, Republicans see an opportunity” (Jan. 12, 2026), on Sen. Stephen S. Hershey Jr.’s characterization of Blueprint funding; William J. Ford, Maryland Matters, “‘Blueprint’ gets a trim after session that threatened major cuts” (April 8, 2025), on the final terms of the Excellence in Maryland Public Schools Act; the Maryland Board of Revenue Estimates’ September 2026 board presentation and report (mdbre.gov); Maryland’s Accountability and Implementation Board’s own interim-evaluation timeline (aib.maryland.gov); and the enrolled text of Chapter 336 of the 2024 Laws of Maryland (House Bill 1082), which sets the Dec. 1, 2026 and Jan. 15, 2027 statutory deadlines and the inflation-cap trigger described above.

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