Wednesday, July 24, 2024

Gov. Wes Moore seeks $150M in budget cuts to pay for child care, health care

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Maryland Gov. Wes Moore proposed $150 million worth of targeted cuts to state spending on Wednesday to finance a child-care subsidy program he has championed and to cover unpredictable Medicaid expenses, his administration said.

The cuts, proposed just 10 days into the new budget year, siphon spending from five agencies and also draw down 10 percent of a state savings account earmarked for specific projects.

Moore, a rising figure in the Democratic Party, was elected on big promises to “leave no one behind” but faced a budget situation unlikely to finance them.

The Maryland Board of Public Works, a three-member panel composed of Moore, the state treasurer and the state comptroller, is scheduled to vote on the cuts to the state’s $57.7 billion budget next week.

The reductions proposed Wednesday affect local health departments, planned raises for public defenders, a drone security program for the Port of Baltimore and an urban forestry program, among other projects. The Moore administration characterized those budget items as enhanced spending that he decided to slow down to funnel cash to higher priorities.

“By increasing state investments in health care and childcare, we will ensure that we elevate our communities, help Marylanders participate in our economy and stimulate long-term growth,” Moore wrote in a Baltimore Sun opinion piece announcing the cuts Wednesday morning. “And on top of that, today’s proposed changes to the state budget won’t cut a penny for critical priorities, from transportation to K-12 education.”

Enrollment exploded in the state’s child-care subsidy program over the past two years, prompting the governor to try to tamp down costs by implementing a co-pay for most families.

At the time, some Democrats criticized the move as balancing the state’s budget “on the backs of working families,” but ultimately the co-pay Moore said was necessary to the program’s sustainability took effect this summer.

Under the program, a family of four earning $126,000 or less can qualify for state help with child care at a certified provider. Roughly 24,000 children were enrolled when Moore took office in January 2023 and more than 40,800 were enrolled as of this June, exceeding the state’s expectations.

Moore argued that investing in child-care assistance helps keeps parents in the workforce and benefits the state’s economy.

A January economic analysis by Maryland Comptroller Brooke Lierman (D) found that 100,000 women have dropped out of the state’s workforce since the start of the pandemic, a rate at least twice as high as the national average. Most of those women were at a peak working age. At the same time, child-care costs rose dramatically in Maryland. Between 2019 and 2023, the average annual cost of child care increased by at least 14 percent and as much as 30 percent, the report found.

State budget employees said they could not estimate how much of the $150 million would be needed for the child-care program vs. paying for unexpectedly high Medicaid costs. In a background briefing with reporters, administration officials said that after seeing both programs would be underfunded, Moore sought cuts early to pay for them.

Maryland has seen Medicaid enrollment remain near pandemic peaks even as states wind down blanket enrollment policies enacted during the pandemic. Just under 1.7 million of Maryland’s roughly 6.1 million people are enrolled in the health-care program for lower-income people, state officials said. Budget experts’ predictions for Medicaid were wrong on two counts: more people have remained enrolled and the cost per person is higher.

Republican leaders, who have a General Assembly minority, offered a mixed review of the proposed cuts. House Minority Leader Jason C. Buckel (R-Allegany) noted in a statement that after increases “in taxes and fees over the last year and a half, we applaud the Governor’s actions to not increase spending or taxes in this instance.” He added: “However, it is important to note these are not true budget cuts — they are essentially a diversion of funds from other priorities rather than really saving any money for future budget shortfalls.”

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