Maryland once knew how to balance a checkbook. It wasn’t that long ago. Under Republican Governors Bob Ehrlich and Larry Hogan, the Free State ran record surpluses, reduced unfunded liabilities, and built one of the strongest rainy-day funds in the nation. Those were the years when fiscal sanity reigned in Annapolis when leadership meant telling hard truths about spending instead of writing blank checks for every shiny new program.
Now? Maryland is back in the red. And it’s not alone.
According to the Reason Foundation’s 2025 Government Finance Report, the twenty most indebted states in America are overwhelmingly blue states run for decades by Democrats who love spending other people’s money. From California’s staggering $497 billion in liabilities to New York’s $233 billion, New Jersey’s $193 billion, and Illinois’s $145 billion, the pattern is impossible to ignore. These are the laboratories of liberalism and the results are a financial experiment gone bad.¹
Maryland ranks ninth in total liabilities at roughly $17.9 billion not as eye-popping as California’s, but significant for a state with just six million people.² Per capita, that’s nearly $3,000 for every man, woman, and child. And that figure doesn’t include the billions in unfunded retiree health care benefits, which Maryland conveniently keeps off the headline books.
The Reason report found that long-term obligations like pensions and retiree health care now make up nearly 72 percent of all state debt nationwide.³ In Maryland, those numbers climbed even as the economy boomed and tax revenues soared. Why? Because Annapolis spent like a trust-fund teenager with someone else’s credit card.
Democratic leaders brag about “investing in the future,” but what they’re really doing is mortgaging it. They increase salaries for state workers, sweeten pension deals, and then hand out billions for projects that look great in campaign ads. The bill always comes due later when the politicians have moved on to Washington or a cushy lobbying job.
Meanwhile, during the Ehrlich and Hogan years, Maryland saw something different: discipline. Governor Ehrlich inherited a deficit from the Glendening era and turned it into a surplus within two years by controlling spending and encouraging private-sector growth. Governor Hogan followed suit a decade later, cutting waste and building a $3 billion surplus even after freezing taxes and tolls. Maryland didn’t need more taxes; it needed adults in charge.
Those years proved something simple: Republican governance works. It’s not flashy, but it’s responsible. Republicans manage state finances the way families manage household budgets by spending within their means and saving for emergencies.
Contrast that with the current leadership. Under Governor Wes Moore, Maryland’s bond rating was downgraded by Moody’s in 2025 the first downgrade in the state’s modern history.⁴ The reason? “Economic and fiscal underperformance.” Translation: too much spending, too little restraint.
The irony is that Maryland Democrats always boast about “protecting working families.” But it’s working families who will shoulder the cost when the debt payments come due. When pensions grow unsustainable, taxes go up. When bond interest climbs, infrastructure spending gets cut. And when revenue slows, the first programs slashed are the ones Democrats claimed to “protect.”
Maryland’s fiscal future now depends on whether voters remember what responsible government looks like. When Republicans were in charge, the books were balanced, the economy grew, and the state earned a reputation for competence. Today, we have ballooning liabilities and a governor more interested in national headlines than state balance sheets.
Let’s be clear: this isn’t just a Maryland story. Blue America is drowning in red ink. California, New York, Illinois, New Jersey, Massachusetts, Connecticut all deep-blue, all heavily indebted, all governed for years by people who think budgets are political statements instead of fiscal tools.
The data doesn’t lie. The states that tax the most, spend the most, and regulate the most are also the states that owe the most. Maryland’s creeping debt is just a symptom of that disease a warning that we are drifting toward the same fiscal cliff as our blue-state cousins.
It’s time for Maryland to remember its past and the men who proved that fiscal conservatism isn’t heartless, it’s honest. Governor Bob Ehrlich. Governor Larry Hogan. They governed with restraint and respect for the taxpayer.
If Annapolis ever wants to see black ink again, it might start by dusting off their old playbooks.
Endnotes
- Reason Foundation, Government Finance 2025, October 2025.
- Ibid., “Top 20 States by Total Liabilities.”
- Ibid., “Composition of Long-Term Debt.”
- Washington Post, “Maryland Bond Rating Downgraded amid Fiscal Concerns,” May 14 2025.
Rusty Sullivan is a contributor to Direct Line News. He can be contacted at Rusty.Sullivan@mcgopclub.com
Direct Line News is a Maryland-based free-access publication committed to the Republican reform tradition.
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