If Virginia Has a Budget Surplus, Why Doesn’t Maryland?

Maryland’s Governor Wes Moore has a ready answer for the state’s looming budget crisis: it’s someone else’s fault. Depending on the day, he’ll point to Donald Trump, or Larry Hogan, or the Republican Party in general.

Governor, look in the mirror; you are the problem.

What Moore fails to acknowledge is that he has been in charge for the last two and a half years. The state’s deteriorating finances are not a legacy problem—they are a direct reflection of his fiscal decisions. He’s not an innocent bystander.

Maryland now faces a structural budget deficit projected to reach $3.3 billion. This is not a one-time shortfall; it’s a chronic imbalance between what the state spends and what it collects. On top of that, analysts forecast a cash deficit of $3 billion in fiscal 2026, ballooning to $6.3 billion by 2030.

The consequences are already visible. In May 2025, Moody’s downgraded Maryland’s general obligation bond rating from its historic Aaa to Aa1—the first time in over 50 years that Maryland lost its top rating. Moody’s cited weaker economic performance compared with other states, mounting long-term liabilities, and budgetary inflexibility.

Just across the Potomac, Virginia is telling a very different story.

Under Glenn Youngkin, Virginia closed fiscal year 2025 in June with a nearly $2.7 billion surplus. Revenues exceeded projections by $572 million. General fund revenues grew 6.1% over the prior year. The state has now recorded four consecutive years of surplus revenues, with unexpended balances totaling roughly $10 billion.

Youngkin has used these strong returns to provide additional tax relief, fully fund Medicaid, and K-12 education. Since 2022, Virginia has delivered $9 billion in tax relief to families and businesses. The Commonwealth has attracted over $125 billion in capital investment commitments from companies locating there.

The result? Virginia maintains its AAA bond rating from all three major credit agencies.

Wes Moore’s latest excuse for Maryland’s struggles is that the state’s economy is disproportionately reliant on federal employment—and that federal job cuts have hurt revenues. But this simply doesn’t hold up under scrutiny. Maryland has 143,000 federal workers. Virginia has 144,000. The numbers are virtually identical. Yet Virginia is posting record surpluses while Maryland sinks deeper into the red.

It’s not just Virginia leaving Maryland behind. West Virginia—once considered an economic laggard—is also running a surplus.

Governor Patrick Morrisey reports that West Virginia closed fiscal year 2025 in June with its own surplus. This came from higher-than-expected revenues and disciplined spending. And West Virginia is not hoarding its gains. The state has lowered its top income tax rate this year to 4.92%, down from 6.5% in 2022.

At its core, Maryland’s budget problem is not about federal employment, national politics, or bad luck—it is about spending choices.

Maryland’s deficit occurred as the state committed to new spending exceeding its revenues – the “Bankrupt Blueprint.” Temporary windfalls—such as pandemic relief—cushioned the problem for Moore’s first years. But now the imbalances have been laid bare.

Instead of confronting this reality, Wes Moore has tried to spin the narrative as if the problem were entirely outside his control. But after more than two years in office, his budgets, his policies, and his priorities are driving the numbers. The downgrade by Moody’s is a clear signal: the market sees Maryland’s fiscal trajectory as less creditworthy than before.

Virginia’s fiscal discipline and West Virginia’s turnaround prove that sound budgeting is entirely possible with the right leadership. The difference lies in the willingness to match spending with sustainable revenues and restrain new commitments, rather than simply grow the size of government.

In Annapolis, that restraint is lacking. Wes Moore’s instinct is to point fingers—at Trump, at Hogan, at anyone who provides a convenient partisan foil. But leadership is about taking responsibility, especially when the news is bad.

When Marylanders see neighboring states lowering taxes, attracting more private investment, and still producing surpluses, they naturally ask why their own state is headed in the wrong direction.

The answer is not in Washington. It’s in the Governor’s Office in Annapolis.

To understand why Maryland is in such poor financial condition, Wes Moore needs only to look in the mirror.

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