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Legislative analysts and DBM outline BRFAA changes, recommend technical edits and targeted reductions
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Summary
Department of Legislative Services told the Appropriations Committee that DLS recommendations change about $203 million of FY26–27 impact in the Budget Reconciliation and Financing Act and asked the panel to strike or delay several provisions; the Department of Budget and Management described administration priorities and said the bill pairs reductions with targeted investments and fund transfers.
The Department of Legislative Services told the Appropriations Committee that its recommended changes to the Budget Reconciliation and Financing Act would produce roughly $203,000,000 in net impacts across fiscal 2026–27, and it urged technical fixes to avoid duplication and legal conflict.
In a presentation to the committee, a DLS analyst said the agency reviewed the BRFAA as introduced and recommended striking or delaying multiple provisions: removing a new requirement that the governor publish printed budget books, delaying increased participation targets for the Young Adult Service Year program for one year, deleting a $42,000,000 higher‑education research grant authorization from the state reserve analysis, and trimming several duplicative authorizations that overlap administration bills. The analyst also recommended increasing authorized transfers from certain dedicated purpose accounts by about $1,100,000 to capture unused balances.
The Department of Budget and Management’s deputy secretary, Mark Nicole, testified in support of HB352 and SB284 and framed the bill as a package of contingent general‑fund reductions and targeted transfers intended to preserve core services while addressing a structural shortfall. "The FY27 budget includes approximately $591,000,000 in contingent general fund reductions tied directly to enactment of the budget reconciliation and financing act," Nicole said, adding that the administration proposes $583,000,000 in fund transfers across FY26 and FY27 to use accumulated balances responsibly.
Nicole and DLS separately discussed the BRFAA’s treatment of cigarette‑restitution settlement dollars and HBCU payments. DBM said the administration intends to apply $35,000,000 in settlement receipts plus $20,000,000 in general funds to meet statutory HBCU obligations and free other settlement receipts for Medicaid and related programs; DBM emphasized the HBCU formula is being funded in FY27. DLS flagged potential duplication between BRFAA language and provisions in administration bills (SB386, HB8097 as referenced in testimony) and recommended striking overlapping language to avoid conflicting outcomes.
On retirement costs, DLS recommended shifting 100% of a projected increase in the state share for teacher, community college and library retirement systems to the local share; the administration had proposed a 50% shift. Committee members asked about the fiscal and local impacts of both approaches.
The presentation concluded with DLS recommendations to cap or sunset certain tax credits and mandates — including a proposed cap on the More Jobs for Marylanders tax‑credit certificates, extending a $9,000,000 cap on a student‑loan tax relief credit for an additional year, and proposing an extension for the student‑loan tax relief study report deadline — which DLS said reflect utilization and statutory reporting shortfalls.
The committee pressed DLS and DBM for fiscal‑year‑28 projections and line‑item clarifications; DBM said staff would follow up. The hearing proceeded to testimony from county and advocacy witnesses on the bill’s local and programmatic impacts.
