Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the State Treasurer Budget topic
No spam. Unsubscribe anytime.
State Treasurer presents fiscal 2026 budget, details Prepaid College Trust changes and bond outlook
Summary
The State Treasurer testified on the office's proposed fiscal 2026 budget, updates to the Maryland Prepaid College Trust and ABLE savings program, investment returns, and recent bond rating developments. DLS recommended concurrence with the governor's allowance.
Micah Richards, analyst for the Department of Legislative Services, and the State Treasurer briefed the Public Safety and Administration Subcommittee on the State Treasurer's fiscal 2026 budget and related program updates.
Richards summarized the Department of Legislative Services analysis, saying the Treasurer's fiscal 2026 allowance increases by about $6 million to $116 million, with roughly $74 million of the total supporting insurance premiums. He told the subcommittee the largest spending increase in reimbursable funds—about $10 million—was driven by higher insurance-premium costs, while the financial systems modernization IT project declined from $5 million to $0 in the allowance.
The DLS presentation described three savings programs overseen by the Treasurer's office: the Maryland Prepaid College Trust, the Maryland 529 prepaid and savings plans, and the Maryland ABLE program. Richards reported that the ABLE program reached $100 million in assets for roughly 6,800 account holders as of Oct. 1, 2024, and that the ABLE average account balance was about $14,000 as of June 30, 2024—about $4,000 above the national average.
The Treasurer addressed the committee following the analysis. The Treasurer said that after taking office he and his team restored account holders' access to full balances and implemented four phases of policy change for the Maryland Prepaid College Trust. He said the office has honored a retroactive 6% earnings payment on historical balances, processed more than 3,300 claims tied to the program transition, and set the earnings rate at 0 percent for prepaid accounts going forward. The Treasurer requested that the committee concur with the Department of Legislative Services recommendation to concur with the governor's allowance.
On investments and credit ratings, Richards noted the state's investment portfolio return fell by 0.3 percentage points in fiscal 2024 compared with fiscal 2023. The DLS report asked the Treasurer to discuss recent general obligation bond ratings and steps the office is taking after Moody's revised the state's outlook from stable to negative earlier in 2024. The Treasurer said the state has retained its triple-A rating from the three major rating agencies and that agency staff remain in close contact with rating analysts as the state finalizes its budget, but also acknowledged Moody's negative outlook cited pension liabilities, debt burden, vulnerability to federal spending shifts and projected structural deficits.
The DLS report also flagged the financial systems modernization project as experiencing production delays and an estimated completion moved to fiscal 2027. The Treasurer described the project's objective as implementing a cloud-based treasury and insurance management system to modernize insurance, accounting and treasury business processes.
The committee did not record a formal vote during the hearing. DLS recommended concurrence with the governor's allowance in its analysis and the Treasurer asked the subcommittee to concur.
