Mayor Brandon Scott unveiled a $4.7 billion budget proposal on Wednesday, calling for a nearly half-a-billion-dollar increase in spending but not accounting for the heavy-handed cost-cutting at the federal level that could dismantle it.
As President Donald Trump battles the courts to push through a barrage of spending cuts, Scott’s proposal marks an 11.4% increase in spending from the year prior without accounting for any changes at the federal level. Instead, facing an $85 million budget shortfall, his administration plans to take a touch-and-go approach as federal actions threaten its coffers on a daily basis.
“This year’s budget outlook is filled with both opportunities and challenges, exacerbated by uncertainty at the federal level and a significant state deficit being addressed in Annapolis,” Scott said in a statement.
“Even in the face of challenging economic circumstances, my Administration is committed to investing in our young people and older adults, improving our core service delivery, and continuing the historic progress we have made on public safety. The FY2026 budget is a reflection of our city’s values. This is not just our financial plan for the next year; it is a roadmap for our future — designed to invest in the safety, health, and prosperity of every resident.”
Officials attributed $203 million in increased spending to growing personnel costs, debt service costs, inflation and the state budget, which includes increased teacher pension costs.
A significant portion of the operating budget, which totals $3.7 billion, focuses on building public safety and healthy communities. Those comprise nearly $1.2 billion and more than $1.1 billion, respectively, according to budget documents.
Hundreds of millions of dollars included in the proposal are essentially up in the air.
Meanwhile, hundreds of millions of dollars included in the proposal are essentially up in the air.
Federal funds comprise about $350 million out of the proposed operating budget and capital budget. As of Wednesday, it was unclear how the Trump administration’s cost-cutting tirade would affect those dollars.
The Trump administration has begun firing federal workers in droves as part of a barrage of cost-cutting measures. Last week, it abruptly announced it would cancel billions of dollars meant for public health programs. That included cuts to funding for services related to mental health, substance abuse treatment and infectious disease prevention, which would come on the heels of a historic drop in fatal overdose deaths in Baltimore.
Maryland and numerous other states have sued to block the move, leaving it entangled in the courts. Meanwhile, a directive from the U.S. Office of Management and Budget to pause federal grants also faces legal roadblocks.
Despite the challenges, all the administration’s orders and their potential impact on cities such as Baltimore remain a prominent fear.
“We’re making adjustments and preparing for that as much as possible, but obviously that is something we have to take day by day. [The mayor] has repeatedly said that, the only certainty when it comes to this administration in D.C. is the uncertainty that they bring,” one senior official from the mayor’s office said during a budget briefing with reporters ahead of the announcement.
Cuts to federal spending have the potential to hamstring departments, including those responsible for public health. The health department, for example, is slated to receive nearly half of its $185 million proposed budget from federal grants. And that amount is already a $23 million decrease from the year prior due to a decline in state and federal aid.
However, it’s not just spending in jeopardy. With no property or income tax increases included in the budget proposal, the White House’s actions could also threaten revenues for the city, which rely heavily on those two taxes.
Property taxes represent just more than 40% of the city’s general fund budget, an increase of $55.8 million over the year prior, according to budget documents. Income tax revenue represented 19%, an increase of $33.1 million over last year.
Both revenue sources could be impacted if jobs are lost due to federal cost-cutting measures.
“We know there are just over 12,000 jobs with federal agencies here in Baltimore City,” another finance official said during the budget briefing. “What we don’t have a great grasp of is how many city residents are commuters that leave our city every day to go to their federal jobs or do their federal jobs from their home under a virtual posture. The other piece that makes this more complicated is that we have industries here in the city and regionally that are highly dependent upon their relationship with the federal government.”
Barring any complications from the federal government — which seem likely — the budget would successfully close the city’s $85 million deficit through fee and fine increases, streamlining expenditures, and identifying savings opportunities across agencies.
In addition to increasing the police department’s budget by $22 million — setting aside a total of $614 million for the department — the budget specifically proposes $1.3 million in spending to replace grant funding that helped sustain the city’s Gun Violence Reduction Strategy. It would also create nine new civilian positions in the department to combat overtime costs associated with patrol positions.
Finally, it suggests using more than $37 million from the new Opioid Restitution Fund to combat the overdose crisis. This year’s budget is the first to benefit from the fund since its inception last year, with all its money coming from a windfall from opioid litigation.
The city is slated to receive nearly $670 million from litigation against opioid manufacturers and distributors, about $200 million of which has already been received. The governance structure, first unveiled last year, mandates that the money be placed into a trust and distributed over 15 years.
Of that money, $19.4 million would be allocated for grants named in individual settlements and $450,000 to the Opioid Restitution Advisory Board, with additional funds for staff, according to budget documents.
The budget also proposed $15.2 million from the fund for additional EMS units, establishing the Division of Overdose Prevention in Health and funding for homeless shelters. Some of those initiatives, however, aren’t new. Rather, the city aims to use some restitution funds to supplant existing spending, officials said.
City officials have previously expressed concerns that they would have to use the restitution funds to replace existing spending rather than revitalize overdose prevention efforts with new initiatives, and numerous states have outlawed such practices. The plan to shift the funds speaks to the complex nature of the next fiscal year’s budgeting strategy.
“While the City of Baltimore cannot control how decisions being made at the federal level will flow through to our community, we can ensure we have tools in place to weather upcoming challenges,” Scott said in a statement Wednesday.
Residents will be able to give feedback on the budget on April 23, when the Board of Estimates hosts its Annual Taxpayers’ Night. It was unclear as of Wednesday morning when additional public hearings would be held.
The Baltimore City Council has until June 26 to adopt a budget for the upcoming fiscal year, which begins on July 1.