Where does the State get its money?
State revenue is generally divided into three main categories: (1) general funds, (2) special funds, and (3) federal funds.
- The general fund consists of any revenues collected by the State that are not dedicated by law to a specific purpose. The individual income tax, retail sales tax, and State Lottery are the three largest sources of general fund revenue. Other sources include the corporate income tax and other business taxes, alcohol and tobacco taxes, and miscellaneous taxes and fees.
- Special funds consist of revenues collected by the State, the use of which is statutorily limited to certain purposes. Special funds may be derived from fees (e.g., car and boat registration and child support applications), taxes levied for a specific purpose (e.g., State property taxes, motor fuel and vehicle taxes, and property transfer tax), local government payments for services, and gifts or donations.
- Federal funds are made available to State and local governments under programs administered by agencies of the Unites States Government. Federal grants are classified as block grants or categorical grants. Block grant funds typically have fewer federal restrictions associated with their use than categorical grant funds, which generally are limited to the specific purposes authorized by law or federal agency rules. In most instances, federal funds must be matched by State funds (general or special) in a prescribed ratio. Medicaid and highway construction are two activities that particularly rely on federal funds.
Click here for a detailed analysis of the revenue structure of Maryland completed in 2018.
What is the size of the State’s budget?
The Fiscal Year 2020 budget appropriation totals $46.6 billion. However, this includes federal funding, which has seen rapid growth in recent years under federal stimulus and health spending, as well as assistance programs during the recession.
Is the State of Maryland’s budget balanced?
Yes. Article III, §52 of the Maryland Constitution requires that the Governor submits and the General Assembly approves an operating budget that is balanced.
How much does the State spend on various issue areas?
$14.4 billion, or 31% of the budget, goes to various health programs for Maryland residents. $8.1 billion, or 17% of the budget, is awarded to local governments for K-12 public education and local libraries. $6.4 billion, or 14% of the budget, is invested in higher education throughout the state. $4.7 billion, or 10% of the budget, is either spent directly by the Maryland Department of Transportation on statewide road construction projects or redirected to local governments to fund their transportation infrastructure improvements. $2.4 billion, or 5% of the budget, is used to provide assistance to poor, elderly, and sick Marylanders. $2.1 billion, or 4% of the budget, goes towards protecting safety of Marylanders through the State Police and correctional system. $735 million, or 2% of the budget, goes toward protecting our environment and preserving our natural resources. The remainder of the budget, approximately $7.7 billion, mostly covers the rest of executive agency operations, the legislative and judicial branches of state government, and the debt service payments on past state capital projects.
How much does the State of Maryland provide in aid to local governments?
Local aid includes direct grants to local governments for various public services such as education, libraries, community colleges, transportation, public safety, health and recreation, and State-paid retirement costs for public school teachers, librarians, and community college faculty. Although grants may be for specific programs or purposes, local governments usually have considerable flexibility in the expenditures of these funds. The fiscal year 2020 appropriation includes $9.2 billion to fund these programs.
Who puts the operating budget together?
The Office of Budget Analysis (OBA) aids the Secretary of Budget and Management in review, analysis, and formulation of a proposed annual State operating budget for the Governor's consideration. For this purpose, the Office evaluates requests for appropriations from all operating units of State government. Click here for more information on OBA.
What is the operating budget cycle timeline?
Click here for information on Maryland’s state operating budget cycle.
What is the State’s fiscal year?
The fiscal year is the financial period used for calculating annual financial statements for the State, and is the period of time for which the State budgets. The Maryland fiscal year runs from July 1 through June 30.
What is the State of Maryland’s bond rating?
The State of Maryland currently has a bond rating of AAA, the highest rating possible, from all three major rating agencies. Maryland is one of only ten states currently to have the AAA rating. The AAA rating means that the State of Maryland can borrow at the lowest possible interest rates.
What is the General Fund?
The general fund consists of any revenues collected by the State that are not dedicated by law to a specific purpose. The individual income tax, retail sales tax, and State Lottery are the three largest sources of general fund revenue. Other sources include the corporate income tax and other business taxes, alcohol and tobacco taxes, and miscellaneous taxes and fees. Although statutes mandate minimum funding levels for certain programs, the Governor has substantial discretion in the allocation of general funds in the budget. The fiscal year 2020 budget appropriation includes $19.4 billion in general funds.
What is the size of the State of Maryland’s Workforce?
As of July 2019, the State of Maryland’s regular (as opposed to contractual) workforce is 80,787 FTEs. This includes employees in all branches of State government as well as State colleges and universities. One decade ago at the beginning of FY 2005, the State workforce was 77,942 FTEs. Over this span of time, the State workforce has increased by approximately 3.7%.
