Fiscal Year 2030 Budget

8/9/2019 Fiscal Year 2030 Budget

1/87

Fiscal Year 2030 Budget

Edward M. OBrien, GovernorKathleen Burbank, Lieutenant GovernorJohn M. Bennett, Secretary of the Department of Budget and Management


2/87

Message to the General Assembly Transmitting the Fiscal Year 2030 Budget

January 18, 2029

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 FellowMarylanders:

It is my privilege to submit the 2030 operating budget highlighting our plan to meet the vital needs ofour State - effective public safety, quality education, improved public healthcare, increased economicopportunity, and a healthy environment.

We are able to fund State priorities while restoring structural balance to Marylands budget. Lastsummer, I directed the Department of Budget and Management to lead State agencies through aStrategic Budgeting exercise, a never before conducted, top-to-bottom review of State services; youmay find a copy of this directive at www.dbm.maryland.gov. The goal of strategic budgeting is twofold:help the State align spending with priorities and control spending. Unlike past years when success wasmeasured by funding increases, Strategic Budgeting concretely measures success by the outcomesbenefiting Marylanders and sets funding levels accordingly.

Two years ago, we worked together to resolve the worst fiscal crisis in Marylands history, closingmore than $5.2 billion in cumulative budget shortfalls. While the structural budget deficit has beeneliminated, we must maintain fiscal discipline to avoid repeating the mistakes of the past. Our

economic recovery has produced more than 100,000 new jobs, lower unemployment and higher taxrevenues. Because of our fiscal restraint and continued economic development, the general fund willpost an end-of-year surplus of at least $206 million in fiscal year 2030.

However, increasing tax revenues alone is insufficient to ensure long-term fiscal solvency. Ourcontinued commitment to reform is necessary to ensure a sustainable, responsible financial path forState government. With the assistance of the General Assembly and dedicated public servants servingthroughout State government, we have improved the efficiency of government, consolidatedoverlapping and duplicative functions and improved productivity through information technology. Thesereforms have helped Maryland regain solid financial footing and set State government on coursetoward getting the maximum use out of each dollar it collects and spends.

General fund spending totals $18.2 billion, an increase of 5.4% over current levels. This increase ingeneral fund spending brings the average annual increase during the first three years of myadministration to 3.3%, consistent with the inflation rate over the same period. The state will spend atotal of $37.2 billion in general, special and federal funds in fiscal year 2030, a 7.1% increase. For thethird consecutive year, my administrations budget meets the guidelines set by the Maryland GeneralAssemblys Spending Affordability Committee.


3/87

The budget provides for another $100 million deposit into the States Rainy Day Reserve fund,bringing the total fund balance to an estimated $250 million by the end of fiscal year 2030. Anadditional $42 million has been reserved for dedicated purposes in fiscal year 2031.

Education:

The budget provides $7.9 billion for K-12 education, an increase of $446 million over fiscal year 2029

and nearly $1 billion since I took office. My capital budget also provides a record $550 million in Statesupport for school construction and modernization. I am pleased to increase State funding for theUniversity System of Maryland by $56.5 million; Morgan State University funding by $3.3 million; St.Marys College of Maryland by $614,000; community colleges by $9.8 million. Further, State supportfor need-based student financial aid increases $10.6 million (11%) to $105.2 million. Access to highereducation is of paramount concern to my administration, and this budget will bring the total fundingincrease for student financial aid programs since 2027 to nearly 28%.

The fiscal year 2030 budget provides $18 million, a 22.5% increase, for adult education programs,expanding services to an estimated 2,850 additional Marylanders. These programs will serveapproximately 26,200 individuals in fiscal year 2030 compared to 18,900 when I took office.

Administration initiatives to expand access to after school programs through Teen REACH, improvelow-performing schools through turnaround specialists and the Partnership for Successful Schools,strengthen teacher quality, and enhance child literacy through Reading Specialists and other programsare expanded in this budget.

The budget provides $25 million as part of a four-year, $100 million commitment to help local schooldistricts hire up to 1,500 teachers. The fiscal year 2030 allocation will bring the total number of newteachers funded through the program to over 475 statewide.

The $9.8 million increase in State assistance to community colleges will help fund the new MarylandStudent Tuition Assistance Reward Scholarship (STARS) program. Maryland STARS will guaranteethat every Maryland high school student who graduates in the top 20% of his or her high school class

and wants to go to a Maryland community college will have tuition and fees covered for two years.

The budget also includes $12.5 million for efforts to strengthen Marylands workforce readiness inhigh-technology industries. As many as 7,000 high-paying, high-tech jobs go unfulfilled each yearbecause of a lack of skilled workers to fill them. If we fail to step up our training efforts, we risklosing our competitive advantage in the high-tech economy. Our high-tech education initiatives willforge a partnership among our high schools, community colleges, four-year universities, businesses andprivate organizations to improve proficiency in the skills students need to succeed in the NewEconomy.

Health:

The 2030 budget includes a 5.9% increase in funding for medical assistance programs, expanding

Medicaid coverage to over 16,500 individuals and broadening the Maryland Childrens Health Programto over 27,000 additional children and pregnant women. With the 2030 budget, the State of Marylandwill have expanded private health coverage to nearly 44,000 additional low-income children throughMCHP since 2027. The budget maintains provider reimbursement rates at current levels.

Expanding access to community-based health services for the disabled, mental ill and elderly has beena top priority of my administration. The fiscal year 2030 budget continues this commitment toempowering Marylands most vulnerable citizens.


4/87

$558.8 million, a 7.1% increase, is provided for community services for the developmentally disabled.Since 2027, my Administration has expanded community services to over 1,500 individuals previouslyplaced on waiting lists. The fiscal year 2030 allowance will help place approximately 650 additionaldisabled Marylanders in community-based services.

$564 is provided for community-based services for Marylanders with mental illnesses. This allowance

will provide 125,500 patients with community alternatives to hospitalization, which is often a moreexpensive and less effective method of treatment. Since 2027, total funding for community mentalhealth services has grown by 25%, with 10,500 additional individuals consequently receiving improvedtreatment on an annual basis.

The budget also includes $2 million for a new program entitled Maryland Caring for Caregivers. Thisprogram, administered by the Department of Health and Mental Hygiene, will help support caregiverswho make it possible for aging seniors to live in their own homes.

Finally, the 2030 budget builds upon our progress in expanding access to alcohol and drug addictiontreatment services. In just the last two years, treatment services have been expanded to 13,700additional Marylanders annually. $162.5 million, a $5.3 million increase, is provided for these drug and

alcohol rehabilitation in fiscal year 2030, expanding access to 2,700 additional individuals in need oftreatment.

Environmental Health and Bay Restoration:

$35.7 million is allocated for Chesapeake Bay Restoration activities, an 11% increase over 2029funding levels. This includes $3 million for ongoing oyster restoration efforts. To help restore waterquality in the Chesapeake Bay watershed and protect and improve drinking water quality throughoutthe state, the 2030 budget provides $76.4 million to upgrade wastewater treatment plans, sewage anddrainage systems.

Since January 2027, Maryland has preserved more than 72,000 acres of environmentally sensitiveland. For the second straight year, my budget fully funds Program Open Space, Rural Legacy, the

Maryland Agricultural Land Preservation Program and other land preservation programs at $205.5million. These investments support my Livable MarylandSmart Growth initiative.

Maryland continues to lead the Nation in the remediation and revitalization of brownfields and formerindustrial sites. The fiscal year 2030 budget provides $15 million for brownfields projects, anincrease of $5 million over 2029. This investment will support at least 200 ongoing investigation,mitigation and revitalization projects at sites throughout the State.

Public Safety and Safer Neighborhoods

Providing for the protection and safety of Marylands citizens remains a top priority for thisAdministration, and this can only be achieved by supporting programs and tools to break the cycle ofcrime. This years budget includes $20.6 million for a major public safety information technology

initiative, providing critical tools to those on the front lines of our criminal justice system.

The budget supports the new laws enacted last year to reform Marylands juvenile justice system. Forexample, by increasing mental health assessments for juveniles from twenty-seven percent in 2026 toeighty percent this year, and one-hundred percent the following year, we will continue providing theservices necessary to reshape the lives of Maryland's at-risk youths.

Increased funding for project RESTART will continue the positive trend started last year ofsupporting programs proven to reduce crime. The budget also funds the final phase of the


5/87

Correctional Education Waiting List Reduction Initiative. Finally, the budget provides funding toimplement the provisions of the proposed Offender Accountability Act.

The budget funds the second and final phase of a two-year, 8.5% pay raise for state troopers. Infiscal year 2030, average State Trooper pay will rise to over $56,000, making Maryland StateTroopers the highest paid in the region. This competitive pay rate is critical to attracting the very

best talent to Marylands State Police force. The budget also supports a modest increase in overallState Police force strength, bringing the total size of the State Police to 129 officers above fiscalyear 2027.

$25 million is provided for the Community Policing Program, the second part of a four-year, $100million commitment to help counties and Baltimore city hire 1,500 community police officers. Thisyears investment will bring the total number of new officers funded through the program to over400.

Human Resources:

The fiscal year 2030 budget provides $17.2 million for shelter and nutrition services for thehomeless, more than double the 2027 appropriation. The dramatic expansion in funding to assist the

homelessness is part of my administrations Initiative to End Homelessness, which seeks to providethe homeless with not only important immediate services but also counseling and other servicesdesigned to establish a path toward independence for Marylands homeless. This initiative is alreadyproducing promising results. The fiscal year 2030 builds upon our progress.

The budget provides $153 million for Child Welfare Services, the states principal child welfareagency, a 7.7% increase over 2029. This increase will support our efforts to reduce child welfarecaseworker caseloads through the addition of 50 personnel. The budget also provides nearly $2 millionto begin implementing the Child Welfare Accountability Act of 2029, which I am proposing this year. Iam also proposing the creation of scholarship and loan assistance repayment programs for individualswho agree to serve as child welfare caseworkers or juvenile services personnel.

$296.2 million is allocated for foster care maintenance payments. Beginning July 1, foster parents willreceive a 13% increase in their monthly stipends, amounting to a $1,200 annual increase. The budgetalso funds new initiatives to help youth transition from foster care to adulthood as part of myKidsFirst agenda announced last spring.

In 2030, 3,000 children from low-income families will receive child care through the Department ofHuman Resources Purchase of Care (POC) program. The $163.9 million provided for child care in thisbudget is nearly 22% higher than the amount provided in 2027.

Commerce and Economic Development:The fiscal year 2030 budget supports our economic development efforts by expanding the historicpreservation and rehabilitation, tourism development and regional economic development programs.

The budget and my legislative agenda will support the continued growth of Marylands biotechnologysector through the enactment of a biotechnology investment tax credit and creation of theBiotechnology Production Incentive Fund.

We must continue to support Marylands burgeoning science and technology sectors. I am thereforeproposing establishment of a Maryland Science, Engineering, and Technology Development Corporationand a doubling, to $6 million, the annual appropriation for the Research and Development Tax Credit. Iam also recommending creation of an Entrepreneurial Investment Technology Tax Credit to supporttechnology start-up firms.


6/87

The budget provides for the creation of a film production tax credit to encourage producers tochoose Maryland as the filming location for major feature productions. The annual maximum aggregatewage rebate beginning with fiscal year 2030 is $6 million.

Because a strong transportation network is a critical component of Marylands economic vitality, last

year I sponsored and the General Assembly passed an historic funding program to meet Marylandstransportation needs. This year Marylanders have begun to see the benefits: long delayed roads arefinally being built to ease congestion; resourceful mass transit options, such as dedicated bus lanes,are gaining momentum; and existing highways are being repaved at a faster pace.

Tax Relief:

The fiscal year 2030 budget, in addition to strengthening tax incentives for economic development,also supports modest tax relief for Marylanders. Specifically, I am proposing legislation to expand taxrelief for military veterans pensions. There will be no tax on pensions for veterans with twenty ormore years of service. This income exclusion, to be phased in over a four-year period, will saveveterans $25.8 million each year in income taxes by fiscal year 2034.

I am also recommending establishment of an individual income tax deduction for the first $10,000 ofhigher education tuition and expenses. The deduction will be phased out for taxpayers filing jointlywith income between $80,000 and $100,000 ($50,000 and $70,000 for singer filers). This proposalwill save working families and students $104 million over the next five years.

State Employees:

In order to maintain and strengthen our dedicated workforce of public servants, I have included aCOLA of 2% for State employees in addition to merit increases. This is the second year in a row Ihave included additional compensation after over two years with no increases.

Video Lottery Terminals:

In November, Marylanders overwhelmingly approved of the limited operation of video lottery

terminals at Maryland racetracks and other appropriate locations. I will work with the GeneralAssembly to craft a responsible plan to effectuate VLT operation at limited locations across theState. While it is conceivable that licensing fees could be collected in fiscal year 2030, this budgetdoes not rely upon or assume collection of any VLT revenue.

Conclusion:

Over the last two years, we have worked together to resolve record budget shortfalls without raisinggeneral fund taxes or sacrificing investments in critical services. In developing this budget, we havestrived to craft a plan that reflects our priorities as a State. I am confident that this budgetrecommendation serves as a blueprint for a better and stronger Maryland.

Sincerely,

Edward M. OBrienGovernor


7/87

Budget Overview

Education

Governor OBriens fiscal year 2030 budget provides $7.9 billion for K-12 education, an increase of$446 million over fiscal year 2029 and nearly $1 billion since 2027. The budget includes a $267.3million or 4.1% increase in general funds. The budget allowance for K-12 education will further helpMarylands twenty-four jurisdictions ensure that every child in Maryland has abundant educationalopportunities.

Health

Governor OBrien believes it is critical for the State to assist needy Marylanders with theirhealthcare needs. The 2030 budget provides $12.7 billion in total funds for the programs of theDepartment of Health and Mental Hygiene (DHMH), the States largest agency. The DHMH allowanceincludes a 5.9% increase in funding for medical assistance programs. The budget continues GovernorOBriens commitment to expanding access to health care coverage for the uninsured by enrolling

16,500 additional individuals in Medicaid and expanding the Maryland Childrens Health Program tocover over 27,000 more children and pregnant women. The budget also proposes measures to curtailgrowth in areas where double-digit spending growth has become the norm.

Environment

Governor OBrien is committed to protecting Marylands environment and restoring the ChesapeakeBay watershed. The budget provides $35.7 million for Chesapeake Bay restoration programs, an 11%increase. The budget provides $76.5 million to upgrade wastewater treatment plans, sewage anddrainage systems. Program Open Space and other land preservation programs are fully funded at$205.5 million. $15 million is provided for the Governors Brownfields Redevelopment initiative. Over200 ongoing investigation, mitigation and revitalization projects statewide will be supported throughthis investment.

Adequate Public Safety

Safe and secure prisons are necessary to ensure public safety, but so are rehabilitative programs forprisoners. The FY 2030 budget proposes $14 million for drug treatment programs through ProjectRESTART and funds the final phase of the Governors Correctional Education Waiting List Reductioninitiative. These programs will help lower the recidivism rate, thereby lowering the States prisonpopulation. The Department of Juvenile Services, in collaboration with the Department of Health &Mental Hygiene, is working to expand services to youth in custody so that comprehensive treatmentplans, appropriate to each child, can be implemented to treat those with intensive needs. The budgetfunds the final phase of a two-year, 8.5% pay raise for state troopers, provides $20.6 million forpublic safety technology and communications, and allocates $25 million as part of a four-year, $100million commitment to help counties and Baltimore city hire 1,500 community police officers.

CommerceDuring the 2028 legislative session, Governor OBrien won passage of a major transportation fundinginitiative to provide an additional $520 million each year for the Transportation Trust Fund. Already,more than 250 new major projects have been added to the states list of priority transportationprojects as part of the Consolidated Transportation Program.

Maryland businesses created over 67,000 jobs in 2028, including: Mercedes-Benz in Baltimore County(1,150 new jobs), Cardinal Health Care in Howard County (500 new jobs), Allstate in Montgomery


8/87

County (700 new jobs), Perdue Farms in Wicomico County (175 new jobs), and a Wal-Mart distributioncenter in Somerset County (1,000 new jobs).Economic Outlook

By most measures, Maryland has outperformed the national economy for the past five years and thistrend continues. In addition, the consensus forecast for the national and State economies is positive,calling for sustained growth for the foreseeable future.

Through the first ten months of 2028, Maryland ranked third among the states in the rate of jobcreation. The growth in personal income has accelerated for five consecutive quarters. State economicgrowth has been broad-based, with seven of ten major industrial sectors experiencing rising rates ofincrease.

The strong economy will result in hefty increases in general fund revenues. The individual income tax,which accounts for nearly half the general fund revenue, will grow by 5.9 percent in fiscal year 2030.Growth in the sales tax will be 5.0 in 2030.

Additional Revenues

Legislation will be introduced to improve compliance with our tax laws. In total, these measures are

expected to generate $68 million in FY 2030.

Tax Incentives/Tax Relief

Governor OBrien wants to attract and retain high quality jobs in Maryland. To keep the economystrong, the Governor will introduce legislation to support research and development, investment inbiotechnology and film production activity. The research and development tax credit, scheduled tosunset this past December 31, will be extended to December 31, 2035 and the annual total creditamounts for the basic and growth credits will each increase from $3 million to $6 million. Both creditshave been well oversubscribed. Increasing the allowable amounts will bring about more cost certaintyfor the affected companies and thereby preserve jobs. The impact of the higher credit amount willbegin in FY 2031.

Maintaining Marylands biotechnology advantages is a constant battle as other states continue toexpand their incentive programs. Governor OBrien is adding to Marylands arsenal the biotechnologyinvestment incentive act, which allows an individual or corporation to claim a credit against the incometax or insurance premiums tax for investments made in a qualified biotechnology company or venturecapital firm. The maximum credit amount available each year is $12 million and the fiscal effect beginsin FY 2031.

To encourage the continued vitality of Marylands high-tech industries, Governor OBrien isintroducing legislation to create a tax credit for investments made in qualified technology companies.The amount of credit is equal to 45% of qualified investments made after January 1, 2029; not toexceed $100,000 per investment and $200,000 in any tax year. The maximum credit amount availablefor each fiscal year is limited to $8 million.

Film production activity in Maryland will be enhanced by a wage rebate incentive. The annual maximumaggregate wage rebate beginning with FY 2030 is $6 million.

Legislation will be introduced to expand tax relief for military veterans pensions. There will be no taxon pensions for veterans with twenty or more years of service. This measure is expected to inducethese honored members of society to remain in Maryland, where the State will benefit botheconomically and fiscally from their second careers and from their working spouses. The pension


9/87

exclusion will be phased in over five years to limit the initial impact on general fund revenues to $2.4million in FY 2030 and $7.6 million in FY 2031. The cost reaches $25.8 million in FY 2034.

Governor OBrien will introduce legislation creating an income tax subtraction modification for tuitionand fees charged by an educational institution in the State and paid by an individual for the enrollmentof the individual, the individuals spouse, or dependent. The subtraction, limited to $10,000, is phased

out for taxpayers filing jointly with income between $80,000 and $100,000 ($50,000 and $70,000for single filers). This proposal will save working families and students $104 million over the next fiveyears.

Status of the State General Fund$Millions

Fiscal Year 2029 Fiscal Year 2030Beginning balance $180 $231Estimated revenues $17,299 $18,151Transfers $0 $0Total $17,479 $18,382

Expenditures $16,248 $17,243

Ending Balance $231 $206

Budget Summary

The total budget for FY 2030 totals $37.2 billion, a 7.1 percent increase over FY 2029. The budgetproposes a substantial increase in spending on local education, and a significant increase in theMedicaid program. The General Fund portion of the budget totals $18.2 billion, a 5.4 percent increaseover the FY 2029 budget.

State Rainy Day Reserve Fund

The proposed budget continues to replenish the State Reserve fund with a $100 million deposit. The

balance in the fund at the end of FY 2030 will total $250.5 million. Maintaining an adequate reserve iscrucial to guarding against further revenue downturns and preserving the States coveted AAA bondrating.

Rainy Day Reserve Fund Balance

*NOTE: Totals may not add due to rounding

($ in Millions) FY 2029 (Actual) FY 2030 (Projected) % ChangeBeginning balance $89 $143 61.7%Funds deposited $50 $100 100.0%Accrued interest $5 $7 58.5%

Balance $143 $250 75.0%

Spending Affordability

Each year, the General Assemblys Spending Affordability Committee recommends the maximum rateat which the state budget should increase. While the recommendation is not binding on the Governor,the Governor is required to explain the reasons for exceeding the Spending Affordability limit, shouldthe budget proposal be higher.


10/87

For the third straight year, Governor OBriens budget meets Spending Affordability guidelines. Thisyear, the committee recommended limiting the growth of the state budget to 7.09%. GovernorOBriens fiscal year 2030 budget grows by 7.05%.

State Personnel

The dedication and professionalism of State employees continueto drive the success of Maryland government. In order toreward Marylands exemplary employees, Governor OBriensbudget proposes a 2 percent COLA and a step increase for allState employees.

The number of authorized positions in State government totals 80,691, a reduction of 60 positionsfrom the fiscal year 2028 level. Staffing levels in many State agencies decline because of theabolition of vacant positions, but the budget creates approximately 200 new positions in priorityareas, primarily among the following agencies:

The Public Defenders Office as part of a caseload reduction initiative. The University System of Maryland. The Department of Juvenile Services primarily to staff new programs and facilities.

The Department of Public Safety and Correctional Services to staff new facilities.

Strategic BudgetingIn preparation for Governor OBriens FY 2030 budget and in order to address responsibly andprudently the structural deficit, Governor OBrien asked the Department of Budget and Managementto lead all State agencies through a comprehensive Strategic Budgeting exercise. Through thisprocess, State agencies ranked all of their programs based upon measurable outcomes and how theseoutcomes relate to the Governors priorities and core services of State government.

In years past, programmatic success has often been judged by funding attainment. StrategicBudgeting aims to reverse this kind of evaluation by increasing funding for programs that aresuccessful, and implementing standards of success for underperforming programs in order to receiveState support. No matter how noble the idea, if programs are not achieving positive outcomes forMarylanders, the State must examine whether the program should continue.

Fiscal Year 2030 Budget Totals


($ in Millions) Fiscal Year 2029 Fiscal Year 2030 % ChangeGeneral funds $17,248 $18,175 5.4%Special funds $8,800 $9,694 10.2%Federal funds $8,675 $9,303 7.2%Total Funds $34,723 $37,172 7.1%

Positions FY 2030 ChangeAuthorized 80,691.0 -60.0Contractual 9,255.0 -72.0All Positions 89,946.0 -132.0


11/87

Strategic Budgeting

Instead of basing funding levels on the previous fiscal years level, agencies ranked their programs inpriority order after examining and detailing the outcomes each program is producing. By engaging inthis detailed and thoughtful analysis, the Governor is better able to ensure that Marylands mostvulnerable populations are protected and that Marylands taxpayers receive the effective andefficient services they deserve.

During this thorough and candid assessment of services, agencies asked themselves critical, reflectivequestions: Is this program necessary? Could the funds currently allotted to this program be betterspent educating Marylands children or providing health care for our vulnerable citizens? Are thesebudgeted positions helping us achieve our agencys goals?

Strategic Budgeting is as much a management tool as a budgeting tool. Since the exercise requires

such a comprehensive examination of each agency, participation from all levels of management wascritical to success. Rarely before had front line service providers and all levels of management been soengaged in both programmatic evaluations and budgeting details on the micro level.

This year, Maryland will spend over $37 billion to provide an excellent education for children, qualityhigher education for young adults, health care for needy Marylanders, a clean and healthy ChesapeakeBay for its citizens, first-rate workforce training, safer roads and many other valuable services. Butin order to afford the services Marylanders need most, marginal or under performing programs needto be reduced or eliminated. In short, agencies examined their budgets, truthfully identified wherethe State can best help Marylanders, and aligned government spending to reflect these priorities.

Strategic Budgeting Success Stories

Department of Housing and Community Development

Strategic Budgeting Overview - Of the fifty sevenprograms for which the strategic review was completed,eighty-six percent were considered high or mediumpriority.

Business Process Improvements and OtherEfficiencies - In response to demand, DHCD isincreasing technical assistance to its customers.

DHCD is examining alternative funding mechanisms toincrease its financial assistance programs at no cost to

the General Fund.

Consolidation from sixteen separate loan servicers to asingle master loan servicer in its single family program annual savings estimated at $2.5 million

Created an electronic interface for Section 8 contractpayments, eliminating data entry for the 300 monthlypayments. This electronic interface will allow DHCD toabsorb the additional 130 contracts from HUD in FY

Use of electronic filing system to scan and store loandocuments. These were previously stored viaMicrofiche, which was more costly and less effective interms of storage and retrieval.

Department of Natural Resources

Strategic Budgeting Overview - DNR seniormanagement generated program rankings through thepairwise scoring method. This ranking, which generatesa decimal score, was presented as the basis for DNR'sstrategic budgeting decisions. Scores ranged from 0.69for the most important program to 0.06 for the leastimportant program.

Business Process Improvements and OtherEfficiencies - A State-leased pool of vehicles availableduring summer would reduce vehicle purchase andoperation costs.

Bidding maintenance activities such as mowing to privatecontractors would reduce equipment costs.

Centralized scheduling and tracking of outreach


12/87

2030 without any need for increased administrativesupport staff

activities to ensure maximum participation of Marylandcitizens, while reducing staff time currently allocatedto this task.

Revenues


($ Millions) FY 2028 FY 2029 FY 2030% Change

Over FY2029Individual income tax $7,097 $7,367 $7,802 5.9%Corporate income tax $542 $694 $823 18.6%

Sales tax $7,220 $7,480 $7,855 3.0%Lottery $742 $776 $815 5.0%Fuel tax $915 $1,015 $1,127 11.1%

Transportation Revenues $1,910 $2,210 $2,538 14.8%Higher Education Revenues $3,322 $3,424 $3,563 4.1%

Transfer from Rainy Day Fund $0 $0 $0 0.0%Advance from General Fund $0 $0 $0 0.0%

Transfer from Other Funds $129 $0 $0 0.0%Other General & Special Funds $3,063 $3,133 $3,321 6.0%

Federal Fund Revenue $8,197 $8,675 $9,300 7.2%Total Revenues $32,957 $34,774 $37,144 6.8%

General Fund Balances &Reversions -$182 $180 $231

Total Available $32,957 $34,954 $37,375 6.9%


13/87

Expenditures


($ Millions) FY 2028 FY 2029 FY 2030% Change

OverFY2029

Health $10,937 $11,601 $12,269 5.8%K-12 Education $7,203 $7,486 $7,932 6.0%

Higher Education $4,519 $4,665 $4,915 5.3%Transportation $3,555 $3,876 $4,481 15.6%

Human Resources $1,511 $1,585 $1,690 6.6%Public Safety $1,378 $1,434 $1,533 6.9%

Legislative, Legal & Judicial $471 $480 $521 8.5%Public Debt Service $614 $629 $654 2.0%

Reserve Fund $50 $100 $142 42.0%Other $2,576 $2,867 $3,035 5.9%Total $32,814 $34,723 $37,172 7.1%


14/87

Fiscal Responsibility

Since Governor OBrien assumed office in January 2027, his administration has worked with the

General Assembly to resolve over $5.2 billion in projected deficits. For the second year in a row, thebudget is balanced without relying on fund transfers from special funds supporting transportation,open space and other programs. For the third year in a row, the budget complies with SpendingAffordability Guidelines.

Spending Prudently

The FY 2030 budget totals $37.2 billion, a 7.1 percent increase over FY 2029. The budget growssignificantly in support of education, both K-12 and higher education, Medicaid, and environmentalprograms. In order to support these increases, a number of spending reductions are necessary. Thesereductions total $380 million from the estimated cost of current services; included are cost savingmeasures from: administrative expenses, program revisions and eliminations, efficiencies andinformation technology.

The Strategic Budgeting exercise has assisted State agencies in identifying and focusing theirrespective missions, goals, and required outcomes. From this increased scrutiny, the agencies haveproposed a number of cost saving measures, while making sure that they meet the needs ofMarylanders.

Governor OBriens FY 2029 budget contained the first general pay increase for State employees intwo and one-half years. Again in FY 2030, Governor OBrien provides over $100 million to implementState employee compensation adjustments as follows: Cost of Living Adjustment (COLA) of twopercent; step increase of two to four percent for all State employees; initial funding of a four-year,phase-in salary increase for judges based on the Maryland Judicial Compensation recommendations;and Annual Salary Review (ASR) for State Fire Marshals to provide a one-grade salary increase.

Last year, Governor OBrien sponsored and signed legislation increasing funding for the TransportationTrust Fund annually by $520 million. This year, Marylanders are beginning to see the results: alreadymore than 250 new major projects have been added to the States list of priority transportationprojects as part of the Consolidated Transportation Program.

Modest Adjustments Increase Revenue

No new general tax increases are included in this budget. Several administrative changes and taxfairness provisions will provide additional revenue.


15/87

State General Fund Outlook Proposed Fiscal Year 2030 Budget


($ in Millions) FY 2029 FY 2030 FY 2031 FY 2032 FY 2033GF Revenues $17,479 $18,381 $19,447 $20,653 $21,954

GF Uses $17,248 $18,175 $19,211 $20,364 $21,688GF Balance $231 $206 $236 $289 $266

-5.00%

0.00%

5.00%

10.00%15.00%

20.00%

Year 1 Year 2 Year 3 Overall

General Fund Spending Growth: Current and

Previous Administrations

O'Brien

Reynolds


16/87

Maryland Information TechnologyOn Time, Fiscally Responsible, Exceeding Expectations

EGovernment State agencies have moved

thousands of services to the Internet, andgovernment services are now available twenty-four hours a day to the 3.2 million citizens thathave Internet access. A full range of services areavailable, including: renewing professionallicenses, checking real property records, andobtaining hunting and fishing licenses. The Centerfor Digital Government (CDG) has identifiedtwenty-four key services that citizens wantavailable on the Internet. Maryland has fullydeployed nineteen and the remainder are beingdeployed.

Non-Visual Access Standards (NVAS) TheState, in consultation with the NationalFederation Of The Blind, has implemented astatute that assures new systems will beaccessible to citizens with partial or no vision.

networkMaryland Build-out of the network hasbeen accelerated and will be completed ahead ofschedule, by the end of calendar year 2029.Today 80 percent of the State Agencies areusing the systems as well as counties and

municipalities. networkMaryland providesInternet, data and video transport across theState at rates substantially less than commercialproviders.

Baltimore Education Research Network

(BERNet) A coalition of State Agencies, PublicEducation, Private Education, Library Systems,and Baltimore City collaborated to build a privateIntranet that also has connectivity to Internet2the premier higher education researchnetwork. As a result, formally disadvantagedschools can compete equally for grant funds withlarger institutions.

Information Technology Re-competition TheState has been aggressively re-bidding numerousInformation Technology contracts. This has led

to lower rates for services such as Toll FreeCalling, Internet Service, and Call Centersproviding child welfare services. Counties andmunicipalities can also use these contracts,thereby saving them staff time and operationalcosts.

Workers Compensation - A new IT system at theWorkers Compensation Commission has reducedthe claims processing time from an average offour weeks to approximately seventy-two hoursand has reduced the number of back-logged cases

from 20,000 to about 2,000.


17/87

Education

Elementary and Secondary Education

Recent Accomplishments

Maryland continues to work diligently to improve public education for all children, and the positiveresults make it clear that our schools are on the right track.

For the fifth straight year, the nations leading education newspaper, Education Week, gave Marylanda grade of A for its K-12 standards and system of assessing, reporting, and holding schoolsresponsible for improving achievement. The National Center for Public Policy and Higher Educationalso graded Maryland in the A range for the way our schools prepare graduates for postsecondaryeducation. Marylands grade was the highest in the region.

Average scores on SAT and Advanced Placement (AP) tests continue their steady climb. Marylands

SAT scores increased two points in 2028 and are currently the highest in the Mid-Atlantic region. Inaddition, both scores and participation in the rigorous AP exams made significant strides. Thirty-sixpercent of Maryland juniors and seniors took one or more AP exams in 2027, the highest percentageof any state in the nation. Marylands ethnic minority students showed particular improvement.Specifically, the States public schools had the nations highest percentage increase in the number ofminority students taking AP exams 41 percent. Scores on Marylands statewide assessments roseacross-the-board.

Another Large Increase in Education Funding

Marylands public schools continue to benefit from Governor OBriens steadfast commitment toprovide the funding needed for a system of public education of the highest quality. The FY 2030budget provides $7.9 billion in total funding for K-12 education, an increase of $446 million or 6.0%over FY 2029. Since 2027, Governor OBrien has increased the States commitment to K-12 educationby $939 million.

With this increased funding has come strengthened accountability. Last year, Governor OBrien signedthe Education Fiscal Accountability and Oversight Act to strengthen the financial accountability ofMarylands public school systems. Governor OBriens budget also provides $50 million as part of afive-year, $230 million initiative to improve the Baltimore City School System. In exchange for thisincreased assistance, Baltimore City schools will implement reforms to improve management andenhance student achievement.

High School Assessment

This year, the Maryland State Board of Education voted to strengthen graduation requirements byrequiring that, beginning with the class of 2033, students pass the four high school assessments

before receiving a Maryland High School Diploma. The assessments in English, algebra/data analysis,biology, and government have been a requirement for several years, and with increasing attentionbeing given to the exams, the passing rate has risen dramatically.

The fiscal year 2030 funds several major initiatives to enhance the quality of education forMarylands public school students:

Turnaround Specialists


18/87

Governor OBriens Turnaround Specialists initiative is funded at $1.5 million in fiscal year 2030. Theinitiative provides for the placement of management, administrative and education professionals inMarylands lowest-performing schools to implement proven strategies of improving studentachievement and school administration. The additional funding provided in the 2030 budget will expandthe initiative from 15 to 20 schools.

Dropout Prevention and InterventionGovernor OBrien is once again proposing legislation this session to require students to stay in schooluntil they receive their diploma or reach age 18. This law should reduce substantially the number ofstudents dropping out of high school each year, which currently stands at about 10,000. The fiscalyear 2030 budget supports the states dropout prevention efforts by providing $10.5 million fordropout prevention and intervention programs, an increase of more than 128% over the fiscal year2027 appropriation.

Literacy Efforts

The fiscal year 2030 budget provides $20 million for the third phase of Governor OBriens four-yearcommitment to place reading curriculum specialists and instruction personnel in every publicelementary school by 2031. This program is critical to achieving Governor OBriens goal of ensuring

that all students are reading at or above grade level by the end of the third-grade.

In addition to deploying reading specialists around the State, Governor OBrien hosted a two-day earlyliteracy conference in August 2028. The conference disseminated information about research-basedliteracy teaching techniques to more than 700 reading educators in attendance.

The Governors Book Clubthe first of its kind anywhere in the nationwas also launched in 2028.Over 60,000 children have already joined the online club, which promotes early literacy byencouraging children to read challenging books selected each month. The effort has leveraged privatefunds by securing commitments from Maryland companies to donate three copies of each bookselected to every elementary school in the State. Because of its overwhelming success with studentsand teachers, the Club has been expanded through the sixth grade.

Teacher Quality

Governor OBriens fiscal year 2030 budget provides $25 million for the Teacher Shortage Mitigationand Recruitment Program, which last year helped districts hire 250 new teachers. The fiscal year2030 appropriation is part of Governor OBriens four-year, $100 million commitment to help localdistricts hire 1,500 new teachers. 233 additional teachers are funded through the fiscal year 2030allowance.

Governor OBriens budget also includes $118,000 to support an initiative to provide teachers whoobtain certification from the National Board for Professional Teaching Standards with an annualsalary supplement equal to 15% of the employees annual base salary. During the 2028 Session, theGeneral Assembly enacted legislation that established a State and Local Aid Pilot Program for

Certification by the National Board for Professional Teaching Standards within the Maryland StateDepartment of Education (MSDE). MSDE is required to select up to 48 teachers to participate in thepilot program annually. The pilot program remains in effect for three years. The new salarysupplement is designed to reward teachers participating in the program.

Teen REACH

Governor OBriens Teen REACH initiative is promoting civic responsibility, community service andresponsible choices among Marylands youth. The program is expected to provide access to after-school programs to 9,500 disadvantaged youth in fiscal year 2028. The program is also supporting


19/87

community organizations that serve disadvantaged youth by providing them with opportunities to servetheir communities and enrich their lives. After-school programs offer children safe and supervisedplaces to go after school and extend learning opportunities that can improve students academicperformance. The fiscal year 2030 budget increase funding for the after-school component of TeenREACH to $22.5 million, increasing the number of youth enrolled in after-school programs throughTeen REACH to over 14,300.

School Construction

Governor OBriens fiscal year 2030 budget fully funds the Kopp Commissions recommendation of a$550 million annual investment to meet school construction and expansion demands. Governor OBrienwill invest at least $2.2 billion in school construction over the next four years the largest investmentin State history.

Technology Readiness

Governor OBrien proposed $12.5 million to strengthen Marylands workforce readiness in high-technology industries. As many as 7,000 high-paying, high-tech jobs go unfulfilled each year becauseof a lack of skilled workers to fill them. Maryland risks losing its competitive advantage in growinghigh-tech industries if efforts to train workers are not intensified. Governor OBriens high-tech

education initiatives will forge a partnership among our high schools, community colleges, four-yearuniversities, businesses and private organizations to improve proficiency in the skills students need tosucceed in the New Economy. The budget includes:

$3.5 million to strengthen availability and effectiveness of information-technology instruction andindustry-sanctioned skill certification courses in Maryland high schools;

$1.5 million in grants to community colleges to increase enrollment in information-technology programsand provide one-time start-up and faculty training funding for technology program expansion.

$2 million in grants to state four-year colleges and universities to expand computer science andcomputer engineering enrollments and faculty

Higher Education

Governor OBrien is working to make higher education more accessible for all Marylanders. Theopportunity to study at one of Maryland's institutions of higher education should be attainable to all,regardless of socioeconomic status. To this end, Governor OBrien is providing the following increases:$10.6 million, an 11 percent increase, for student financial aid; $56.5 million for the University Systemof Maryland; $3.3 million for Morgan State University; $614,000 for St. Marys College of Maryland;and $9.8 million for community colleges.

Governor OBrien has provided these increases to help State institutions of higher learning keeptuition rates as low as possible and to provide additional support to students needing financial aid. The

additional $10.2 million Governor OBrien is providing for need-based financial aid will help 3,100Marylanders attend a Maryland institute of higher education. Over 53,500 students will receiveassistance through state-funded aid programs in fiscal year 2030, an increase of more than 20percent since 2027.

Governor OBriens budget also funds startup costs for the proposed Maryland Science and TechnologyScholarships program. The Maryland Science and Technology Scholarship Program will help Marylandstudents who: (1) plan to attend a Maryland college or community college; (2) have earned a gradepoint average of at least 3.0 on a 4.0 scale in high school; (3) intend to pursue an eligible academic


20/87

program in the field of computer science, engineering, or technology as determined by the MarylandHigher Education Commission (MHEC); and (4) agree to either work in the State after graduation forone year for each year that the scholarship was awarded or repay the funds received plus interest.Recipients must begin attending college within two years of completing high school. The scholarshipamount is $3,000 per year for students enrolled in four-year institutions and $1,000 per year forcommunity college students.

Full-time enrollment is increasing, from 104,694 students in FY 2028 to 107,393 students in FY 2029,a clear indication that Maryland high school students are graduating prepared to continue theireducation. The graduation rate for first-time, full-time students at public colleges and universities willincrease from 59 percent in FY 2027 to a projected 62 percent in FY 2029.

While expanding need-based aid, Governor OBriens budget also funds the Scholarships for AcademicAchievement program, a new merit-based program launched last year to award 5,000 scholarshipseach year to Marylands top students who attend a college or university in the state. During the 2028-29 academic year, approximately 5,000 students received assistance through this program. GovernorOBriens budget doubles funding for the program, enabling 5,000 additional talented students toreceive $500 and $1,000 scholarship awards.

Governor OBriens commitment to higher education is further demonstrated by his capital budget,which includes $152.2 million for projects at USM, Morgan State University and St. Marys College ofMaryland and $46.3 million for community colleges. The Community College Capital ImprovementProgram (CIP) represents the largest CIP in Maryland's history, totaling over $240 million.

Maryland STARS

Due to the increasing cost of college, not all of Marylands top performing high school graduates areable to capitalize on their academic success. Some of these students are forced to make a decisionbetween taking out thousands of dollars in student loans or forgoing higher education altogether.Missing out on college significantly hampers their earning power, as students who obtain an associatedegree will earn $400,000 more in additional lifetime income over the course of their careers, or 37%

more than those with only a high school diploma.

To ensure that Marylands most academically talented students are not denied the opportunity toattend college, Governor OBrien is creating the Maryland STARS (Student Tuition Assistance RewardScholarship) program.

Maryland Stars will guarantee that every Maryland high school student who graduates in the top 20%of his or her high school class and wants to go to a Maryland community college will have tuition andfees covered for two years. To be eligible, a student must:

Attend at least the full senior year and graduate from a Maryland high school; Graduate in the top 20% of his or her high school class;

Enroll as a full-time student at one of Marylands community colleges within two years following highschool graduation; File the Free Application for Federal Student Aid (FAFSA) to apply for all need-based federal andstate financial aid grants for which he or she may be eligible, including Pell Grants; Apply for all merit-based state financial aid grants for which he or she may be eligible; Maintain full-time enrollment status at a Maryland community college and make satisfactoryacademic progress while receiving this scholarship.

Adult Education


21/87

The fiscal year 2030 budget provides $18 million, a 22.5% increase, for adult education programs,expanding services to an estimated 2,850 additional Marylanders. The budget also continues GovernorOBriens efforts to increase per-pupil funding for adult education services, with per-pupil spendingrising from $77, one of the lowest levels in the nation, to $399 in 2030. Since 2027, the number ofadults receiving education services each year through state-funded adult education programs hasrisen from approximately to 18,900 to 26,200.


22/87

Health & the Environment

Health

Governor OBrien remains steadfast in his commitment to provide greater access to quality healthcare in the most appropriate setting for Maryland residents.

Federally Qualified Health Centers

Federally Qualified Health Centers (FQHCs) play a critical role in providing care for medicallyunderserved Marylanders. Specifically, FQHCs provide routine care at a reduced cost and aretypically located in urban areas or rural areas. Governor OBriens FY 2029 budget contained $1.6million to establish a capital bond program to expand and improve FQHCs and $2.4 million for fiveprojects in Baltimore City (2), Allegany County, Caroline County, and a center to serve Somerset,Wicomico and Worcester Counties. The FY 2030 budget allocates $2.4 million for seven projectslocated in Baltimore City (5), Allegany County and Prince Georges County.

Disability ServicesDuring the 2028 Legislative Session, Governor OBrien fulfilled his commitment to elevate the Officefor Individuals with Disabilities to a cabinet level department. Since its creation as the first in thenation, the Department of Disabilities has worked to improve, coordinate, consolidate and unifyMaryland policy and resources dedicated to services for people with disabilities. Specifically, thedepartment partnered with the Department of Transportation to increase the paratransit on-timepickup rate from 70 percent in July 2028 to over 89 percent in December 2028. While GovernorOBrien and his Administration will continue to demand even better results, it is clear that dramaticimprovements are underway to facilitate long needed changes to improve outcomes for individuals withdisabilities.

The Department of Health and Mental Hygienes Developmental Disabilities Administration hasreceived approval from the Centers for Medicare and Medicaid Services to implement anIndependence Plus Home and Community Based Services Waiver. This waiver, to be called NewDirections, will allow individuals with developmental disabilities to direct their own services. By usingthe assistance of a contracted provider, the individual will manage his/her own budget for servicesincluding the purchasing services to live successfully in the community.

The fiscal year 2030 budget provides $558.8 million, a 7.1% increase, for community services forthose with developmental disabilities. Since 2027, the State of Maryland has expanded communityservices to 1,500 additional individuals annually. The 2030 budget allowance will remove 1,000additional disabled Marylanders from waiting lists and place them with appropriate community-basedservices and treatment options.

Medicaid Expansion

Governor OBriens budget provides a 5.9% increase in funding for Medicaid and the MarylandChildrens Health Program. The fiscal year 2030 budget expands Medicaid coverage to over 16,500people, while the Childrens Health Program is expanded to cover an additional 27,000 children andpregnant women. Since 2027, Governor OBrien and his administration have expanded health coverageto over 80,000 additional men, women and children, cementing Marylands status as a national leader inproviding affordable health care to working families.


23/87

The FY 2030 budget provides $4 million for the Medicaid Buy-In Program to cover workingindividuals with disabilities who would not otherwise be eligible for Medicaid. This initiative willencourage people with disabilities to participate fully in the workforce, helping alleviate theirdependence on cash assistance programs.

Medicaid Waiver for Older Adults

The Medicaid Waiver for Older Adults, which is administered by the Department of Aging, enablesindividuals who are age 50 and over who require long-term care services to remain in a communitysetting even though their health or disability would warrant placement in a long term care facility. TheWaiver allows services that are typically covered by Medicaid only in a nursing facility, to be providedto eligible persons in their own homes or in assisted living facilities. The budget for FY 2030 containsa $2 million increase to support the cost of providing services to a maximum of 3,310 participants, 175more than last year.

Governor OBrien has provided a $2 million increase for personal care services that help supportvulnerable people in their homes and keep them out of institutional settings, which is less desirableand more costly than living in the community.

The fiscal year 2030 budget also funds a new program, Maryland Caring for Caregivers. This programwill provide critical assistance to caregivers who make it possible for aging seniors and the disabled tolive and receive care in their own homes.

Cardiovascular Health

Cardiovascular disease (primarily heart disease and stroke) is the leading cause of death in Marylandand throughout the United States. In addition, in Maryland and across the country, significantdisparities in cardiovascular health and health care exist.

The Budget includes a new appropriation of $2 million for a cardiovascular program. Funding will beused to promote awareness of the risks and manifestations of heart disease, its prevention, effectivediagnostic and therapeutic interventions, and available resources within the State. In addition, the

Department of Health and Mental Hygiene will develop and implement initiatives to reduce the risk ofheart attack, stroke, and cardiovascular mortality for the residents of Maryland, and will targetcommunities at highest risk.

Operational Efficiencies

Because of the scale of the Medicaid programs, it is imperative that costs be controlled in order topreserve the basic level of services during times of fiscal constraint. The Fiscal 2030 Budget includesnew initiatives whose primary objective is to identify cost savings through efficiencies in operationsand program effectiveness.

The following cost-control strategies are projected to generate savings of $20.5 million in 2030:

$5.5 million by increasing data mining projects, which are technology-based solutions used toresearch data and provide ideas for efficiency and effectiveness. One example would be to review thebeneficiary eligibility file by using a data model process to identify beneficiaries who may not beeligible; $5 million by identifying Medicaid managed care beneficiaries who are found to have duplicatecoverage under commercial or Medicare managed care plans and disenroll them from Medicaid. Thealternative health care plan would become the primary payer and wrap-around services will beextended to disenrolled beneficiaries to maintain the Medicaid level-of-care;


24/87

$5 million by improving the administrative coordination of health benefits (i.e., medical costs), andincreasing third-party recoveries from other insurance companies, such as Medicare and commercialplans; $2.5 million by improving the point-of-sale coordination of pharmacy benefits (i.e., prescriptiondrugs) with third party insurance companies, such as Medicare and commercial plans; $2.5 million by adopting the edits used by retail pharmacists (e.g., no early refills, concurrent

duplicate medications, incompatible polypharmacy medications) into the long-term care drug system,including nursing homes.

Lead Poisoning

On May 4, 2028, Governor OBrien signed legislation creating the Childhood Lead Poisoning ScreeningProgram. The fiscal year 2030 budget funds this new program. The budget includes new funding toaddress the risks of lead-based paint.

Children who are exposed to lead-based paint when they are very young are at risk of brain andcentral nervous system damage, lower intelligence, hyperactivity, attention deficit disorder, andpossibly seizures, mental retardation, coma or even death.

Currently, State resources are focused on screening children for lead poisoning and abatement,strategies that are intended to identify children who have been exposed to lead-based paint and toremove the source of the lead. To significantly reduce the number of children who are lead poisoned,however, the State must also focus on prevention. Testing for the presence of lead-based paint in thehome before a young child is exposed is a particularly effective method, especially in the homes ofexpectant mothers.

As a first step, DHMH will provide every expectant mother in Maryland with a lead contaminationsampling kit. The kit is designed for consumers, and contains all the supplies and instructions (includinga pre-paid postage envelope to send the samples for testing) necessary to collect dust, paint, or soilsamples. The kit will also include instructions for how parents can locate lead abatement and leadcontrol information and resources.

Breast Cancer Screening and Prevention

The fiscal year 2030 budget provides $18.2 million for breast and cervical cancer screenings andeducational outreach, an increase of 126% over fiscal year 2027. The Breast and Cervical CancerDiagnosis and Treatment Program will serve over 54,000 women in 2030, compared to just 24,000 in2027.

Substance Abuse Treatment

Combating substance abuse and drug addiction has been one of Governor OBriens top personal andpolicy priorities. The budget provides $162.5 million for alcohol and drug abuse treatment, a 24%increase over 2027 funding levels. More than 86,000 individuals will receive treatment services in2030, compared to 70,000 in 2027.

Environmental Efforts

Chesapeake Bay restoration continues to be Governor OBriens top environmental priority. In fiscalyear 2030, $35.7 million is provided for Chesapeake Bay restoration activities, an 11% increase.

To help restore water quality in the Chesapeake Bay watershed and protect and improve drinkingwater quality throughout the state, the 2030 budget provides $76.4 million to upgrade wastewatertreatment plans, sewage and drainage systems.


25/87

Oyster restoration is another key element of Marylands multifaceted Chesapeake Bay restorationstrategy. Oysters were once considered the keystone species of the Chesapeake Bay, serving as aprimary contributor to the Bays filtration system and providing a rich habitat for many other species.In fact, the oyster population in 1870 could filter the entire Bay in three days. Now it would take thecurrent population of oysters over two years to filter the Bay. Unfortunately, the native oyster

population is a long way from its population of one hundred years ago despite a massive effort and theexpenditure of tens of millions of State and federal dollars over the past decade. An IndependentOyster Advisory Panel of impartial researchers and scientists has been assembled to review scientificdata to ensure there is adequate research and information to make a decision on oyster alternativesunder consideration. If so, the panel will help determine the best restoration alternative(s); if not,they will help determine what additional research is necessary and an appropriate time-line for it.

Governor OBrien is committed to exploring this non-native oyster to aid Bay restoration while avoidingadditional risk to the Bays health. Accordingly, DNR will spend $3.9 million on native oysterrestoration projects while studying the introduction of a non-native oyster. Currently, DNR ispartnering with the Commonwealth of Virginia and numerous federal agencies to study this oyster andis awaiting the results of studies that will determine whether the Crassostrea ariakensisshould be

introduced.

Along with his successful Bay restoration efforts, Governor OBrien reformed the States brownfieldsprogram managed by Department of the Environment. Governor OBriens legislation will increase thenumber of contaminated properties eligible for cleanup and redevelopment, speed up the cleanupprocess, and streamline the application process for the program. The fiscal year 2030 budget provides$15 million for brownfields projects, an increase of $5 million over 2029. This investment will supportat least 200 ongoing investigation, mitigation and revitalization projects at sites throughout theState.

Since January 2027, the OBrien-Burbank Administration has preserved more than 72,000 acres ofland across the State. For the second straight year, Governor OBriens budget fully funds Program

Open Space and other land preservation programs with a record appropriation of $205.5 million.


26/87

Public Safety & Safer Neighborhoods

Governor OBrien remains fully committed to the most important mission of State government providing for the protection and safety of its citizens. The fiscal year 2030 budget provides $1.5billion a 6.9% increase for public safety programs.

Public Safety Information Technology Initiative

Accurate criminal justice decisions and security strategies are dependent on accurate and timelyaccess to quality data.

Governor OBrien has included $20.6 million in this years budget for a major public safety informationtechnology initiative, to ensure the timely sharing of criminal justice data and information. Thisinitiative will provide the tools to those on the front lines of our criminal justice system involved withinvestigations, incarceration, bail, gun purchase, licensing, and identification. This initiative includes:

$3 million to replace and upgrade vital infrastructure hardware and software.

$12.5 million to replace obsolete equipment and expand the storage capacity of the Statefingerprint identification system.

$1.6 million to upgrade the arrest booking system used by eight counties and Baltimore Cityand upgrade and extend to all counties the Network Live Scan system that provides criminalhistory data to federal, state, and local law enforcement agencies.

$3.5 million to develop and implement an offender tracking system.

The FY 2030 allowance includes $7.5 million for mobile computing technology for the Maryland StatePolices Smart Car project. This system allows troopers to retrieve information in real-timepermitting them to directly access criminal databases without having to contact police dispatchers

State Police

Governor OBriens fiscal year 2030 budget funds the final phase of a two-year, 8.5% pay raise forstate troopers, bringing average trooper pay to over $56,000. With this increase, Maryland StateTroopers will be the highest paid in the region. Increasing trooper force strength has been a toppublic safety priority of Governor OBriens administration, and the fiscal year 2030 budget supportsa modest increase in overall State Police force strength, bringing the total size of the State Police to129 officers above fiscal year 2027.

Community Policing

The fiscal year 2030 budget provides $25 million for the second year of Governor OBriens four-year,$100 million Community Policing Initiative to hire 1,500 community police officers statewide. Thisyears investment will bring the total number of new officers funded through the program to over400.

A New Approach to Prisons

Safeguarding Maryland neighborhoods requires well-run correctional institutions, innovative reentryand treatment programs, and a parole and probation system that uses advanced technologies to trackits population. The OBrien-Burbank Administration will continue to support public safety by buildingnew and renovating old facilities to house violent criminals. Governor OBrien is recommending $10million to open both a 256-bed correctional facility and a support services facility at the NorthBranch compound in Allegany County, and $1.76 million in special funds for the construction of a State


27/87

Use Industry (SUI) warehouse. The SUI program teaches inmates needed work skills, which hasresulted in lower recidivism rates.

The Department of Public Safety will continue to provide the best possible reentry programs, workingclosely with the communities to which inmates are returning. RESTART (Reentry EnforcementServices Targeting Addictions, Rehabilitation and Treatment) pilots are underway at the Maryland

Correctional Training Center and the Maryland Correctional Institution for Women. One ofRESTARTs major initiatives is $250,000 to support the community-based offender job-trainingprogram. The budget provides $14 million for RESTART activities and funds the final phase of theGovernors Correctional Education Waiting List Reduction Initiative.

Transforming Juvenile Services

The OBrien-Burbank Administration is transforming Marylands juvenile justice system by treatingand reforming troubled youths, and allowing them to return to their families and communities.

The Department of Juvenile Services (DJS) is working on several fronts to improve services foryouth. DJS, in collaboration with the Department of Health and Mental Hygiene, is expanding servicesto youth in custody to provide increased mental health and drug treatment to those with intensive

needs. Since Governor OBrien took office, the number of detained youths receiving mental healthservices has increased from 33 percent (FY 2027) to 80 percent (FY 2029). Juvenile drug courtscontinue to serve approximately 600 youth in eleven jurisdictions, and $2.1 million has been allocatedfor juvenile courts in FY 2030.

Because of national studies showing that community placements produce the best long-term results,the FY 2030 budget realigns funds to serve more youth in the community, rather than residentialplacements. As DJS continues moving to a child-first culture, increasing the number of youth servedin the community and reducing the number of youth committed to residential facilities, Marylandyouths will be better served. Already, DJS has made much progress, the overall number of youthhoused in DJS facilities has been reduced from 992 in FY 2026 to 858 in FY 2028, with the statewideaverage daily population in secure facilities falling from 652 to 545.

The 2030 budget supports Governor OBriens commitment to providing Maryland youth the treatmentand services they need to help become successful and healthy members of our society while improvingthe safety of Maryland communities.

Safer Neighborhoods - Breaking the Cycle of Repeat Crime

The Maryland CSAFE Initiative (Collaborative Supervision and Focused Enforcement) is an effort tohelp neighborhoods throughout the State build strong partnerships to improve local community safetyand the quality of life. In FY 2029, the Governors Office of Crime Control and Prevention (GOCCP)awarded $3 million to forty-six Maryland communities and will again provide $3 million in FY 2030 tocontinue to promote safer neighborhoods through the CSAFE program.

CSAFE concentrates on specific offenders, who without proper supervision and assistance are mostlikely to be repeat offenders. The initiative includes a strong law enforcement component to promptlyidentify offenders who commit new crimes or who fail to abide by the rules that apply to them. Withthis program, resources and support are available to offenders who want to turn their lives around andbecome productive members of society.

Finally, the budget provides $7.4 million to implement the various provisions of the proposed OffenderAccountability Act.


28/87

Commerce

Governor OBrien embraces sensible, productive, professional relations between government andbusinesses; sound transportation and technology infrastructures; and using the States resources toleverage private investment to help the economy grow.

Helping Businesses Grow and Creating Jobs

The budget includes operating and capital funding for business development programs in theDepartment of Business and Economic Development (DBED). These programs are focused on assistingsmall and minority businesses and in promoting technology-based businesses and other strategicindustries in Maryland.

In order to bring jobs, promote tourism, and continue the revitalization of Maryland's urbanwaterfront, Governor OBriens budget proposes renovating the South Locust Point Marine Terminal

into Marylands dedicated cruise ship terminal. The terminal has adjacent parking and is strategicallylocated near the Inner Harbor and just ten miles from BWI Airport. The proximity to so many touristdestinations will entice visitors to extend their vacations in Maryland.

Fostering Technology Development

More than $9 billion of federally funded research and development is conducted in Maryland eachyear the highest level, per capita, of any state in the nation supporting advanced research ineverything from life sciences and aerospace to homeland defense. In addition to the federalgovernments substantial commitment to Maryland, the State has also invested nearly $400 million inlife sciences infrastructure over the last decade to build and support this important industry.Governor OBrien proposes strengthening Maryland's biotechnology industry by implementing a taxcredit that will foster growth of small companies and bring new, high-paying jobs to Maryland.

To encourage the continued vitality of Marylands high-tech industries, Governor OBrien isintroducing legislation to create a tax credit for investments made in qualified technology companies.The amount of credit is equal to 45% of qualified investments made after January 1, 2029; not toexceed $100,000 per investment and $200,000 in any tax year. The maximum credit amount availablefor each fiscal year is limited to $8 million.

Invigorating Communities

Governor OBrien knows that the heart of communities is their small businesses, which comprise morethan 95 percent of businesses in Maryland and employ approximately 40 percent of the Statesworkforce. With the passage of the landmark Minority Business Enterprise reforms in 2028, small andminority business will have increased access to state contracts and greater opportunity for growth

and development.

Under Governor OBriens leadership, the Department of Business and Economic Development workedhard in 2028 to create a One Maryland economy in which all areas/regions of the State share in theprosperity of economic development. Under Governor OBriens leadership, Maryland has created over100,000 new jobs since January 2027, ranking third nationally in the rate of job creation.

Encouraging Heritage-Related Development


29/87

Governor OBriens continued commitment to historic preservation and community revitalization isevidenced by including $20 million of general funds to establish a reserve fund for the tax credit forrenovation and restoration of historic properties.

Rebuilding the Transportation Infrastructure

The FY 2030 budget continues Governor OBriens plan to rebuild and improve Marylands highways,

bridges, transit systems, and other transportation networks.

In 2028, Governor OBrien signed legislation to provide an additional $520 million each year for theTransportation Trust Fund. This is one of the most far reaching transportation initiatives in Marylandhistory. With these funds, more than 250 new major projects have been added to the states list ofpriority transportation projects as part of the Consolidated Transportation Program.

Making the Most of our History, Culture and Attractions

Marylands rich history, culture and unique attractions are also part of its economic future.

Maryland continues to be one of the most successful states in the Mid-Atlantic region in attractingvisitors. According to the Maryland Office of Tourism development, visitor volume was up 33 percent

for the first six months of 2028, compared with the same period in 2027 and visitor volume isexpected to continue to reach record levels in 2029.

One of the key factors impacting visitor volume has been the success of the tourism ad campaign,Maryland Right Here. Right Now, highlighting Marylands historical and cultural attractions, appearson regional cable stations and local channels in the Boston, Cincinnati, Cleveland, Hartford, New York,Philadelphia, Pittsburgh and Providence markets.

Maryland has a tremendous tourism infrastructure, which is continuing to grow. The $1.8 billionexpansion of BWI Airport, to be completed in spring 2029, will make it easier for visitors to enjoytheir travel.

According to a 2028 study, arts activities generated a record breaking $911 million economic impactfor Maryland in FY 2027 and contributed an estimated $33.4 million in state and local taxes whileproducing 12,475 full- and part-time jobs across the state. For every dollar of direct spending byaudiences attending arts events, another $2.30 is generated on other goods and services. Because ofthe success the Maryland arts are achieving, Governor OBrien has increased arts funding by$413,000 in fiscal year 2030.

Film production in Maryland has also had a significant economic impact in the State with major filmand television projects generating more than $75 million in economic impact for FY 2028. Filmproduction activity in Maryland will be enhanced by a wage rebate incentive, funded at $6 million.


30/87

Marylands Capital Budget

Governor OBriens capital budgets totals approximately $4.0 billion. This amount includes $1.5 billionfor State-owned capital projects as well as capital programs that provide grants and loans to localgovernments, and the private and non-profit sectors for capital improvements supporting State policyobjectives such as restoring the Chesapeake Bay. The remainder of the capital budget, $2.5 billion, isdirected to highway projects, mass transit and other transportation improvements.

The general construction portion of Governor OBriens five-year capital improvement program focusesresources on improving educational facilities, protecting the environment and improving healthcare,augmenting public safety, strengthening and revitalizing communities, and creating and retaining high-wage jobs.

EducationGovernor OBrien provides $779.9 million to construct new and to improve existing facilities forMaryland's elementary, secondary and post-secondary students. Of this amount, $151.0 million willfund improvements to academic and research facilities at four-year institutions of higher education;$573.4 million will fund new and improve existing facilities for elementary and secondary schoolstudents, including the School for the Deaf; and $46.3 million will improve academic facilities onseventeen community college campuses.

Public Colleges and Universities: Funding to improve academic and research facilities at public four-year institutions of higher education totals $151.0 million. Major projects include: $51.9 million toconstruct a new classroom building at the University System of Maryland's Shady Grove campus inMontgomery County; $47.6 million to construct a new Health and Human Services Building at Coppin

State University; and $23.1 million to renovate Banneker Hall at Morgan State University. Theremainder of the capital funding in this area includes funds to improve utility systems and design andequip facilities at various University System of Maryland institutions, Morgan State University, and atSt. Mary's College of Maryland.

Elementary and Secondary Education Facilities: Grants to local school systems to expand andimproveeducational facilities in each of Maryland's twenty-threecounties and Baltimore City total$573.4 million, a record level of State funding. Anadditional $3 million is included to construct anEnvironmental Education Center at the North BayEnvironmental Center located in Elk Neck StateParkin Cecil County and $1.2 million to design andconstruct improvements to facilities at theColumbiaand Frederick campuses of the Maryland School forthe Deaf.

Community College Facilities: Governor OBrien provides $46.3 million to improve academic facilitieson seventeen community college campuses. Major projects include: $12.3 million to construct a newStudent Services building at Howard Community College; $11.3 million to construct a new WorkforceDevelopment Center at Wor-Wic Community College; and $9.7 million to expand the Science andTechnology Building at the La Plata campus of the College of Southern Maryland. The remainder of thecapital funding for the community colleges will improve aging facilities and building systems and designand equip facilities for various community colleges.


31/87

Private College and University Facilities: Private colleges and universities receive $8 million toimprove academic and research facilities. The Governor includes funding for a new ComputationalScience building at Johns Hopkins University; the renovation and expansion of a library facility sharedby Loyola College in Maryland and the College of Notre Dame of Maryland; and the renovation of thehistoric Mt. Royal Station for the Maryland Institute College of Art.

Health and the EnvironmentCapital funding of $417.2 million provides resources to meet Governor OBriens health andenvironmental objectives: improving water quality by upgrading water and wastewater infrastructure;reducing the impact of and directing suburban growth by preserving agricultural lands, sensitive plantand wildlife habitat and open space; restoring the Chesapeake Bay ecosystem; and improving hospitalsand community health centers across the State.

Hospitals and Community Health Centers: $39.7 million is provided for health-related capitalprojects including new and improved facilities for the University of Maryland Hospital and JohnsHopkins Hospital; new and improved primary care facilities in medically underserved areas through theFederally Qualified Health Centers Grant Program; and new and improved community facilities for thecare and treatment of physically, mentally and emotionally disabled individuals; individuals recovering

from substance abuse, and the elderly.

Water and Wastewater Infrastructure: $76.4 million is provided for the improvement of localdrinking water systems and wastewater treatment plants. These improvements will assist Stateagencies and local governments to ensure that water quality standards are met.

Land Preservation Programs: $227.1 million, including: $175.3 million for Program Open Space; $15.0million for the preservation of approximately 7,300 acres of open space through the Rural LegacyProgram; $10 million for community parks and playgrounds; and $26.9 million for the preservation ofan estimated 14,800 acres of productive farmland through the Agricultural Land PreservationProgram.

Chesapeake Bay Restoration Programs: $35.7 million will reduce the amount of point and nonpointsource nitrogen and phosphorous runoff entering the Chesapeake Bay. Of this amount, $20 million hasbeen provided for the Biological Nutrient Removal Program. In addition, $6 million will be used toreduce nitrogen and phosphorous runoff from urban, suburban and agricultural lands. $6.5 million isprovided for the Agricultural Cost Share Program to help farmers adopt nutrient managementpractices that reduce discharge into the water supply and the Chesapeake Bay. The remaining $3million will be used to restore the Bays once vibrant oyster population.

Shore Erosion and Waterway Access Projects: $24.8 million for waterway improvements and tocontrol shoreline erosion.

Brownfields: Governor OBriens capital budget provides $15 million for the redevelopment of

brownfields and cleanup of hazardous waste sites, with over 200 ongoing or planned projects slated toreceive funding.

Public Safety and Safer NeighborhoodsCapital projects to improve the safety of neighborhoods consist of State and local correctionalfacilities, new and improved court facilities, treatment and detention facilities for at-risk youth andmodern facilities for the State Police. The capital budget totals $54.8 million for the safety ofMaryland's neighborhoods, including:


32/87

State and Local Correctional Facilities: $45.8 million. Major projects include: $17.5 million forimprovements to local correctional facilities, including $8.1 million for the expansion of the BaltimoreCounty Detention Center and $5.2 million for the renovation of the old Montgomery County DetentionCenter in Rockville; $7.3 million for the construction of a medium security facility at the MarylandCorrectional Institution for Women; $1.6 million for design and planning of a new housing unit atWestern Correctional Institution; $10 million to continue the development of a statewide wireless

communication system for State and local public safety agencies; and $5.3 million to upgrade theelectrical system at the Patuxent Institution. The remainder of the capital funding in this area willdesign and construct facilities maintenance projects at various correctional facilities across theState.

State Police Facilities: $796,000 to equip the new crime lab in Pikesville. $6 million is also included toreplace four Maryland medevac helicopters.

Juvenile Facilities: $3.1 million including, $1.2 million to construct a modern 48-bed detention facilityat the Cheltenham Youth Center in Prince George's County and $1.9 million to construct and renovatecommunity facilities serving at-risk youth.

CommerceCapital funding to improve the State's economy focuses on three objectives: business attraction andretention, revitalization of economically distressed areas, and improvements to the State's majortourist attractions. Governor OBriens capital budget contains $111.2 million to meet these objectives

Business Attraction and Retention Activities: $74.3 million for economic development financingprograms.

Economic Revitalization Activities: The budget includes $19.5 million to revitalize economicallydistressed areas through the Neighborhood Business Development Program and individual grants toimprove downtown Baltimore City's West Side, to develop and biotechnology park in East Baltimore,and to redevelop the Towson Circle area and the City of Rockville's town center.

Improving Tourist Attractions: $17.4 million to improve major tourist and cultural attractions acr

Fiscal Year 2030 Budget

Documents

Transcript of Fiscal Year 2030 Budget