ANNAPOLIS — State officials Friday announced a series of budget cuts they said could reduce spending by nearly $400 million in coming years.
Included in the reductions are $50 million in cuts that are part of the fiscal 2026 budget. The bulk of the savings — $326 million — would come over as many as 25 years as part of an effort to shift employees out of state-owned buildings and into commercial office space.
“While the federal government recklessly slashes budgets and lays off public servants, we are using data to save taxpayers money and modernize government in a targeted way,” Gov. Wes Moore, a Democrat, said in a statement. “This announcement is only the beginning of our efforts. Together, we will continue to prioritize fiscal discipline and ensure we deliver essential services to all Marylanders, efficiently and effectively.”
Moore, in announcing his proposed 2026 budget in January, promised to find $50 million in savings. The effort was a small part of attacking what was then a projected $3.3 billion structural budget deficit.
Moore set up a work group to look for savings within state agencies. The group was tasked with looking for efficiencies in procurement, real estate and fleet management.
Officials who briefed reporters Friday said they hit their target.
The largest portion of the savings — about $30 million — for the fiscal year that starts July 1 will come from changes in state technology. Officials said underutilized mobile and land phone lines will be eliminated.
The state will also standardize laptop purchases and keep equipment longer before buying replacements.
Another $14 million of the proposed savings will come from standardizing shipping and delivery options. Officials said the savings will come from ensuring state employees are aware of and use contracts that offer the best rates.
The final $6 million comes from consolidation of the state’s vehicle fleet. Departments will purchase fewer vehicles and spend less on fuel and maintenance.
All that is in addition to $16 million the state Department of Information Technology had planned on saving from centralizing the programs it uses for employee access to computer systems as well as cybersecurity tools.
“Our data-driven approach to modernizing state government operations is saving taxpayer dollars,” Chief Performance Officer Asma Mirza said in a statement.
The bulk of the savings — $326 million — is expected to come from moving state employees out of nine buildings in Baltimore City that are owned and maintained by the state. Those employees will move to commercial space in the city’s central business district.
The total amount of savings would come over a 20- to 25-year period, officials said.
One state official told reporters that the state hopes to take advantage of the large amount of available commercial office space and negotiate “very aggressive lease rates.”
The state was already moving out of the decaying State Center property.
At one point, the plan was to partner with the private sector to redevelop the 25-acre state office complex, which sits on a Metro stop and is adjacent to the light rail.
The plan, which was approved in 2009, fell apart, and then-Gov. Larry Hogan, a Republican, filed a lawsuit to terminate the $1.5 billion project. The developer countersued. The Board of Public Works, led by Moore, voted unanimously in November to settle with developer State Center LLC for $58.5 million.
At the time of that settlement, there were fewer than 5,000 employees from seven state agencies at the center. The state plans to move all remaining employees to other locations by the end of 2026.
A final plan for the property has yet to be determined. It is unclear if the property will be taken over by the city or sold to a developer.
The state also plans on moving employees out of two other buildings — the William Donald Schaefer Tower on St. Paul Street and the Nancy Grasmick building at 200 W. Baltimore Street.
Officials told reporters that relocating those employees could take up to three years. The goal, they said, was to open the properties up for redevelopment and put them back on city tax rolls.