Ferguson rolls out ‘scary' list of cuts, favors broadening business sales tax list
Senate President Bill Ferguson (D-Baltimore City) laid out $1 billion in potential service cuts that he said "scare me because they're very real and being contemplated" as lawmakers struggle with the budget. (File photo by Bryan P. Sears/Maryland Matters)
The leader of the Maryland Senate unveiled $1 billion in new budget cuts Friday that he said could be considered as state leaders contemplate continued uncertainty in the federal budget.
Senate President Bill Ferguson (D-Baltimore City) said the legislative session now entering its final three weeks 'is continuing to be the most uncertain session that I have ever experienced in this role and in the 15 years I've served in the legislature.'
Lawmakers are moving closer to finalizing a fiscal 2026 budget that must address a projected $3 billion structural budget gap as well hundreds of millions in lower-than-expected revenues announced earlier this month.
They got a rare bit of good news when it appeared Congress would be able to avert a potential federal government shutdown at midnight Friday. A new report by Moody's Ratings ranks Maryland at the most risk from federal budget actions.
Gov. Wes Moore (D) proposed a budget with $2 billion in cuts and a tax modernization plan that would cut taxes modestly for 60% of Marylanders, while raising taxes on the state's highest earners.
Lawmakers are expected to tinker with Moore's proposal, and recently added a plan for a possible 2.5% tax on services between some businesses.
The Senate president said his chamber will expand Moore's $2 billion in cuts by as much as $500 million, and warned of more if there are additional spending and employee reductions at the federal level.
Ferguson showed reporters a graphic of 10 possible budget cuts of about $100 million each, what he called '10 illustrative, real examples, things that we are actively contemplating incorporating into' a potential budget.
They include three Medicaid cuts that would net $100 million each: Dropping coverage for more than 11,000 people; cutting dental care for every Medicaid recipient; and eliminating Medicaid coverage for pregnant women who earn 264% of the federal poverty level.
Another nearly 37,000 people could lose food stamp benefits, 36,000 could see unemployment claims go unpaid and more than 114,000 households would lose home energy assistance.
The list also included several public safety measures, including releasing more than 1,500 inmates or closing either Spring Grove Hospital or Clifton T. Perkins. Both offer forensic psychiatry services to people charged with crimes, including violent offenses.
'As we face these difficult choices, these are just 10 examples of how you get to the next billion,' Ferguson said. 'We have got to figure out a path towards sustainable revenues as well. And so that is … the balanced approach that we are going to continue to try to take.'
Ferguson, who has said he has a 'high bar' for raising taxes, was asked if the chart was meant as a scare tactic to boost acceptance of a coming increase.
'All of those cuts certainly scare me. And they scare me because they're very real and being contemplated,' Ferguson told reporters.
'We are constitutionally required to balance our budget. We will, and we are going to make additional cuts. We are at the place now where we are talking about core service provision of the social safety net that's impacted if we just had a cuts only approach,' he said. 'And so yes, it is scary, and we know that … this is what we should be counting on government to be able to provide. And I believe most Marylanders agree.'
One revenue source under consideration is a tax on some services between businesses. The current proposal – late-filed bills in the House and Senate — includes a 2.5% sales tax on business-to-business services including accounting, consulting and tech services. Tech services and consulting would pay 66% of the tax under the current proposal.
Business leaders voiced their opposition during hearings Wednesday. But Ferguson said he believes some version of the tax will be included in the final budget plan for fiscal 2026.
He added his chamber is looking at excluding independent contractors, sometimes called '1099 employees.' Other changes could come to sole proprietorship businesses or specific industries that are disparately impacted. He did not give an example.
A plan could emerge for a services tax that applies to more businesses, but at a lower rate.
'I would love to find a way to have a broader base and a lower rate, which I think is a more efficient tax approach,' Ferguson said. 'But we have to figure out how far we can get in cuts, and then what the gap would be, to see what we're going to need in order to be sustainable moving forward.'
The legislature is also facing growing public outcry over spiking utility costs that are expected to shoot up again in the summer.
Utility companies and regulators were grilled Wednesday by two committees seeking answers. Ferguson said days earlier that the hearing was about finding options for immediate rate relief and was not meant to 'create scapegoats and bogeymen' to deflect ire away from lawmakers.
Solutions remain elusive.
'We are looking for any possible solution to get money into the hands of ratepayers to help with the burden of increased energy costs,' Ferguson said.
But he acknowledged the challenge 'because I'm not sure that there is a short-term solution. We know that we have to make decisions today that allow for longer-term solutions, getting more Maryland-made energy so that we have greater predictability, reliability and affordability and energy. But we are looking forward to putting some measures in the budget this year that will at least get some level of resources to ratepayers who are really struggling.'
Ferguson was asked if the relief would be meaningful.
'I think anything is meaningful, and it's in the eye of the beholder,' he said. 'We'll do whatever we can that is fiscally responsible for the long term … financial health of the state to help ratepayers however we can, while building for the future.'
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
34 minutes ago
- Yahoo
Entire Fulbright Scholarship board quits, citing Trump admin actions
All members of the Fulbright Foreign Scholarship Board announced their resignation on Wednesday, releasing a statement accusing President Donald Trump's administration of political interference in the prestigious exchange program. The 12-member board alleged the Trump administration "usurped the authority of the Board" by denying Fulbright awards to "a substantial number of individuals" who were selected for the 2025-2026 academic year. The board also alleged the administration is currently "subjecting" an additional 1,200 international Fulbright recipients to "an unauthorized review process and could reject more." "We believe these actions not only contradict the statute but are antithetical to the Fulbright mission and the values, including free speech and academic freedom, that Congress specified in the statute," the board said in its statement. MORE: State Department delivers crushing news to Fulbright scholar hopefuls in Afghanistan The board oversees the Fulbright Foreign Student Program, which offers international graduate students, young professionals and artists the opportunity to study and conduct research in the United States. The government-funded, non-partisan program -- which was established by Congress in 1942 under then-President Harry Truman's administration -- operates in more than 160 countries worldwide, providing scholarships to approximately 4,000 foreign students annually. In the joint letter on Wednesday, the board said the awards that were overridden by the administration were concentrated in biology, engineering, architecture, agriculture, crop sciences, animal sciences, biochemistry, medical sciences, music and history. MORE: State Dept. suggests Afghan Fulbright hopefuls seek other options as program stalls The board claimed it has raised "legal issues and our strong objections with" senior Trump administration officials "on multiple occasions," including in writing, but says the concerns have not been acknowledged. In a statement to statement to ABC News after the board announced its resignation, a senior State Department official called the decision "a political stunt attempting to undermine President Trump." "It's ridiculous to believe that these members would continue to have final say over the application process, especially when it comes to determining academic suitability and alignment with President Trump's Executive Orders." the official said. The board, however, said in its statement that the decision was not one "we take lightly," woth the board calling on Congress, the courts and future Fulbright Boards to "prevent the administration's efforts to degrade, dismantle, or even eliminate one of our nation's most respected and valuable programs." "Injecting politics and ideological mandates into the Fulbright program violates the letter and spirit of the law that Congress so wisely established nearly eight decades ago," the board concluded in its statement. Entire Fulbright Scholarship board quits, citing Trump admin actions originally appeared on
Yahoo
an hour ago
- Yahoo
Congress Agrees on One Thing: National Seersucker Day
Congress can't seem to agree on anything these days with Republicans and Democrats seemingly at loggerheads over every piece of legislation. But Sen. Bill Cassidy, a Republican from Louisiana, and Rev. Raphael Warnack, a Democrat from Georgia, have put aside party politics to partner on a resolution marking Thursday, June 12, National Seersucker Day. This is the 12th year that Cassidy has championed the cause, which celebrates the summer fabric, since he revived the tradition in the U.S. House of Representatives in 2014. More from WWD Ray and Charles Eames' Furniture to Be Focus of New Exhibition Gaurav Gupta Talks Bollywood Star Kiara Advani's Met Gala Gown - It's a Loaner Tarun Tahiliani Offers a Modern View of India-made Fashion 'Seersucker Day honors the New Orleans invention that's made America fashionable — and the summer heat bearable — since 1909,' Cassidy said. 'For one day a year, the Capitol looks a little more like the French Quarter. We might not always agree on policy, but we can all agree: wool in June is a mistake.' 'I'm excited to return as the co-chair for the annual Seersucker Day in our nation's capital and continue celebrating this iconic Senate tradition,' said Warnock. 'Seersucker is more than just a fabric, it is a material deeply woven into Southern culture. National Seersucker Day is a proud bipartisan tradition, and I look forward to working alongside Senator Cassidy to carry it on.' The use of seersucker was popularized in 1909 by New Orleans businessman Joseph Haspel Sr., who brought the puckered cloth popular in India to his home town and created suits that would stand up to the city's scorching summer heat and humidity. Haspel's great granddaughter Laurie Haspel Aronson still runs the company today. In 1996, former Mississippi Sen. Trent Lott brought Seersucker Thursday to Congress, where it was observed for several years. After falling by the wayside in 2012 and 2013, Cassidy revived it. The senator has invited other members of Congress to don their seersucker outfits for an official photograph at the Ohio Clock in the U.S. Capitol on Thursday at 12:30 p.m. ET, and he also encouraged all Americans to wear the fabric as well. Best of WWD Young Brooke Shields' Style Evolution, Archive Photos: From Runway Modeling & Red Carpets to Meeting Princess Diana The Most Memorable French Open Tennis Outfits With Serena Williams, Naomi Osaka & More [PHOTOS] Beyoncé's 'Cowboy Carter Tour' Outfits, Live Updates: Schiaparelli, Burberry, Loewe and More

USA Today
an hour ago
- USA Today
Major student loan changes just came one step closer to becoming law
Major student loan changes just came one step closer to becoming law A 71-page bill released by Senate Republicans would cut down on repayment plans and deem certain college programs ineligible for federal financial aid. Show Caption Hide Caption Senators grill Education Secretary Linda McMahon over proposed cuts Education Secretary Linda McMahon testified to Congress over proposed budget cuts. WASHINGTON – Congress is closer than it's been in a long time to massively reforming college financial aid. On June 10, GOP lawmakers in the U.S. Senate proposed their version of the higher education section of President Trump's tax and spending megabill. The 71-page portion of the so-called "One Big Beautiful Bill Act" would set new caps on student loan borrowing while drastically cutting the number of repayment plans. Read more: Republicans propose massive overhaul of student loans, Pell Grants The Senate's version of the legislation is less aggressive than the bill that Republicans in the U.S. House of Representatives introduced in late April. While it will likely be further watered down due to congressional budget rules, the scope of the legislation indicates big changes will be enacted soon to how Americans pay for college. Student loan caps proposed When President Donald Trump asked Republicans to find billions of dollars in federal spending cuts, GOP lawmakers in the House drew up measures to eliminate or dramatically curb many student loan programs. In April, they proposed cutting subsidized loans altogether for undergraduates. When students take out a federal direct subsidized loan, the government pays the interest while they're in school (and for a short grace period after the students complete their studies). That idea didn't survive in the Senate version of the bill, which was expected to be slightly more moderate than the House proposal. Read more: Could Trump fail on tax bill? Why going 'big' doesn't always work out as planned Other elements of the House version remain, however. Like the House bill, the Senate measure proposes cutting the number of student loan repayment plans to just two. That change would kill President Joe Biden's Saving on a Valuable Education, or SAVE, program, which former Education Secretary Miguel Cardona repeatedly called the "most affordable repayment plan ever." SAVE has been stalled in court for months, placing roughly 8 million people in forbearance. The Senate bill would also dramatically curb lending for graduate students and parents (though at lower caps than House Republicans wanted). Ben Cecil, a senior education policy advisor at Third Way, a center-left think tank, said he was pleased to see the bill appeared to make compromises. "These loan limits are much more reasonable," he said. Melanie Storey, president of the National Association of Student Financial Aid Administrators, said she was "relieved" some of the "most harmful" provisions of the House bill had been nixed. "Still, there are several concerning aspects of this bill that would ultimately make college less affordable for students," she said, including changes that "may drive borrowers to riskier private loans, which are not available to all borrowers." Less concern over Pell Grants One of college access groups' biggest criticisms of the initial bill was a significant change to Pell Grants, federal subsidies that help lower-income students pay for college. House Republicans wanted to increase the number of credits students would need to take each semester to be eligible for Pell Grants. The Center for American Progress, a progressive think tank, estimated that two out of three Pell recipients could've lost their grants or received smaller ones if that requirement were enacted. The Senate version takes a softer approach, codifying a provision to more fully exclude higher-income students qualify for Pell funds. At the same time, the bill expands Pell Grants in ways that could waste money, according to critics such as Sameer Gadkaree, president of The Institute for College Access & Success, a college affordability group. 'While the Senate nixed most of the House's proposed cuts to the Pell Grant program and averts a looming funding shortfall, it regrettably threatens the program's long-term stability by extending Pell eligibility to unaccredited programs that are unlikely to pay off for students," Gadkaree said in a statement. New accountability rules One of the biggest distinctions between the House and Senate versions of the bill is that they lay out two entirely different sets of new accountability rules for colleges. The House proposal would fine colleges for leaving students on the hook for unpaid student loan debt. The Senate's framework suggests taking federal financial aid away from college programs if they can't prove that students who graduate are earning more than they would have without a degree. Mike Itzkowitz, who served in the Education Department under President Barack Obama, said that concept has bipartisan support. "I don't know anyone who would be willing to fork over their time to take on loans to earn less than a high school graduate," he said. But it's possible that particular provision won't survive special Senate rules. To avoid needing the support of Democrats, Republicans are trying to pass Trump's "Big, Beautiful Bill" using the budget process. That strategy comes with challenges. However, the bill must only make changes that spend money or save money. Significant reforms to college oversight might go too far, said Jon Fansmith, the senior vice president of government relations at the American Council on Education, the main association for colleges and universities. "This process isn't designed to do complicated policymaking," he said. "I really do worry about rushing something through without understanding what we're doing." Zachary Schermele is an education reporter for USA TODAY. You can reach him by email at zschermele@ Follow him on X at @ZachSchermele and Bluesky at @