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Buyout offers, hiring freeze coming for state government amid budget crunch
Gov. Wes Moore hands a pen used to sign the state's $67 billion fiscal 2026 budget to House Appropriations Chair Ben Barnes. (Photo by Bryan P. Sears/Maryland Matters)
The Moore administration plans to slash about $121 million from the state's personnel budget through a combination of buyouts to state employees, a hiring freeze and elimination of at least 150 vacant positions, officials said Tuesday.
The measures were announced in a 'Dear colleagues' letter from Gov. Wes Moore (D) to state employees that was sent at noon Tuesday.
'We are moving with care and intentionality to minimize impact on current employees and be transparent throughout the process,' Moore wrote in the letter.
Moore Chief of Staff Fagan Harris said in an interview with Maryland Matters that state officials have been trying for weeks to come up with a plan to get the savings from the state's general fund, in accordance with the fiscal 2026 budget that the governor signed in May.
'It's going to be all of these things that help us get to the number, ultimately,' Harris said.
As recently as two weeks ago, the administration was looking at layoffs of current workers as part of the budget-cutting mix, an administration official said at the time. But Harris said Tuesday that they were ultimately able to stop short of actual layoffs.
Even so, the measures will hamper Moore's goal of growing the state workforce. When he took office in 2023, Moore pledged to rebuild state government, including by filling 5,000 positions left vacant by his predecessor, Gov. Larry Hogan (R). And Moore has recently pushed state agencies to hire former federal workers in search of new jobs amid the Trump administration's cost-cutting measures.
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As of the end of May, there were about 4,800 vacancies in all state agencies, a 9.3% vacancy rate, according to Raquel Coombs, a spokesperson for the Department of Budget and Management.
The administration's plan excludes the University System of Maryland, which previously announced cuts. Also excluded from the hiring freeze are the state's '24/7' facilities, such as prisons, hospitals and juvenile facilities, as well as sworn state troopers, Harris said. Administration officials said they're still crafting the buy-out plan and choosing which vacant positions to eliminate, but those same positions are likely to be excluded.
As part of Tuesday's announcement, the administration is also pushing state agencies to come up with 'creative' cost-cutting solutions, Harris said. That includes 'in-sourcing' contracted jobs and consolidating physical facilities, to the extent possible, he said.
Harris said that non-union employees, including those in the governor's office, will not receive planned salary increases, such as merit raises and step increases. But they will receive a 1% cost-of-living increase in July.
Patrick Moran, president of the American Federation of State, County and Municipal Employees Council 3 — which represents more than 26,000 state employees — said the state's ongoing issues with 'chronic understaffing, dangerous working conditions, and unsustainable workloads' must be taken into account as the final decisions are made on cuts.
'While it's clear our state must navigate tough and volatile times, any solutions cannot come at the cost of providing quality state services,' Moran said in a statement Tuesday.
He said the union will push for cost-saving measures that 'prioritize our state services and the workers who make them happen.'
'That includes eliminating costly contracts, in-sourcing services where needed, addressing other inefficiencies, and closing corporate tax loopholes to raise much-needed state revenue,' Moran wrote.
Del. Ben Barnes (D- Anne Arundel and Prince George's), chair of the House Appropriations Committee, said he was pleased to see the governor take a path that did not include cuts of current staff.
'I'm very happy to see that there will not be furloughs or layoffs, as they're not warranted or necessary given our current fiscal picture,' Barnes said.
Sen. Guy Guzzone (D- Howard), chair of the Senate Budget and Taxation Committee, hailed the governor's move as 'very reasonable and logical.' It should achieve the $121 million in needed cuts, but Guzzone warned that further cuts at the federal level could force state officials back to the drawing board.
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'We don't know what else may come along — what other shoe might drop,' Guzzone said. 'But I think it's important to keep a level head and make reasonable decisions along the way. And I think this was a reasonable decision by the governor.'
Barnes said that, based on data from the Department of Legislative Services, he believes the $121 million in savings could be achieved solely by slashing vacant positions.
'Anything beyond that would be additional actions the governor was taking,' Barnes said.
Barnes said the state has reached a solid fiscal position, citing the state's triple-A bond ratings this year from Fitch and Standard & Poor's.
Critically, though, Maryland lost its treasured triple-A bond rating this year from Moody's, the third major bond rating agency, which also downgraded half a dozen other state borrowing programs.
Republican legislative leaders criticized the Moore administration for not enacting the hiring freeze sooner, even as the state's financial woes became clear.
'Back in February, I questioned the wisdom of expanding state government while facing a $2.8 billion deficit. I said then, and I repeat now: when you're in a hole, you need to stop digging,' wrote Sen. J.B. Jennings (Baltimore and Harford) in a statement. 'The decision to finally enact a hiring freeze and reduce vacant positions is the right one — but it should have happened months ago, before the situation became more urgent.'
Jennings and other Republicans called for the freeze as early as February, in response to Moore's budget proposal. But Moore administration officials had balked at taking such a step.
'Let's be honest: this is the Moore Administration quietly admitting that Senate Republicans were right,' said Senate Minority Whip Justin Ready (R-Frederick and Carroll) in a statement.
Moore's 'Dear colleagues' letter said the hiring freeze will begin July 1. Harris said it is likely to last at least through the fiscal year.
The precise terms for voluntary separation agreements are likely to be released in the coming weeks, Harris said, adding that the administration does not yet have a goal for a number of buyouts.
'We want to drive as much adoption as we can, but there's no specific target,' Harris said.
The administration is planning to bring a list of vacant positions to the Board of Public Works for elimination around September.
'We want to make it so that the public does not feel these changes,' Harris said. 'We certainly are aware of a large universe of savings there, but we're going to be really careful and intentional this summer, as we work through this to achieve as many savings as we can responsibly.'
