Committee questions state reserve and DPA/CIF proposals as disparity grants face cuts

At the Appropriations Committee hearing, Jacob Cash (Department of Legislative Services) presented the fiscal 2027 state reserve fund and dedicated-purpose account (DPA) proposals, saying the FY27 state reserve allowance increases by about $58,000,000 to roughly $126,000,000 and that the rainy-day fund ending balance would be approximately $2,400,000,000 (about 8% of estimated general fund revenues).

Cash described a set of new DPA appropriations funded by transfers from the Strategic Energy Investment Fund (CIF) totaling $82,000,000: $42,000,000 for higher-education research into energy resiliency and climate, $25,000,000 to establish a strategic energy planning office created in the 2025 special session, and $15,000,000 for grid-enhancing and advanced transmission technologies. DLS recommended deleting the $42,000,000 higher-education research item as a one-time infusion that would not replace ongoing revenue researchers rely on and recommended that expansion of CIF uses be authorized by separate legislation.

Secretary Jake Weitzman defended the proposed higher-education funding, arguing it would help universities transition toward energy resiliency research and offset federal funding losses. “Universities in Maryland have been severely impacted by the unprecedented attack on higher education by the Trump administration,” Weitzman said, adding that the administration has engaged the University System of Maryland, Morgan State University and Johns Hopkins University on possible uses.

Committee members also debated a BRFAA provision that would reduce the 2027 disparity grant total from a formula amount of $203,600,000 to a proposed $176,600,000 (about $27,000,000 in savings) and would effectively lock that level through FY29. Cash warned that the BRFAA proposal would have an outsized effect on certain jurisdictions, singling out Prince George’s County and Allegany County as particularly affected. The committee chair indicated the panel is likely to reject the BRFAA disparity-grant change.

Cash also summarized the payments-to-civil-divisions budget (fiscal 27 allowance $181,200,000), noting that the disparity grant comprises the vast majority of the appropriation and that the end of the prior year’s one-time enhancements reduces the uncapped grant share back toward 75% of the statewide average, which produces jurisdictional shifts in funding.

What’s next: DBM and DLS will follow up as requested; the committee signaled intent to scrutinize CIF-to-DPA transfers, the proposed higher-education research infusion, and the BRFAA disparity-grant provision during budget mark-up.