Eastern Shore legislators, led by delegation Chairman Del. Christopher T. Adams, got an early look Friday at how Gov. Wes Moore’s proposed budget could reshape state support for local governments and schools, with state analysts warning that some rural counties could face sharp reductions in health department aid and long-running disparity grant funding.
During the Feb. 6 weekly meeting, budget analysts from the Maryland Department of Legislative Services, led by Hiram Birch, told the delegation the nine Eastern Shore counties are projected to receive about $935 million in state aid in fiscal 2027 under the governor’s proposal. Most of that funding would flow to public schools.
“This is based on the governor’s proposed budget,” Birch told lawmakers, noting that final figures could change before the General Assembly adopts a spending plan later this session.
Birch said overall state aid to Eastern Shore jurisdictions would increase by about $17 million next year, but he cautioned that the topline figure masks significant pressure points for county governments, particularly in lower-wealth jurisdictions such as Dorchester County.
The most immediate concern involved the disparity grant program, which provides additional state funding to counties with weaker income tax bases. Birch said proposed changes would reduce funding for the four Eastern Shore disparity grant counties, including Caroline, Dorchester, Somerset, and Wicomico, after a one-time enhancement approved last year, and as teacher retirement supplemental grants are fully phased out.
“These funds are intended to support low-wealth jurisdictions,” Birch said. “It may be very difficult for these counties to offset reductions through their own tax bases.”
Sen. Johnny Mautz asked analysts to provide a written summary outlining how multiple funding changes would affect disparity grant counties simultaneously.
Local health department funding drew extended discussion after Del. Kevin Hornberger questioned why rural counties appear poised to lose funding under the proposed allocations.
According to figures presented by the Department of Legislative Services team, Dorchester County’s local health department faces a projected reduction of nearly $480,000, while Talbot County could lose more than $320,000. Several other Eastern Shore counties could see cuts ranging from 10 to 15 percent.
Birch said the reductions stem from changes adopted by the General Assembly last year that limited growth in health funding formulas and curtailed discretionary funding for salary increases for state employees.
Valerie Monroe of the Department of Legislative Services said rural counties are disproportionately affected because many local health department employees outside urban areas are state workers.
“When you constrain growth in this program, it’s the salary enhancement portion that takes the hit,” Monroe said. “That impacts rural counties more heavily.”
Birch and Monroe told lawmakers that some of the projected reductions could be mitigated later in the budget process if the Department of Budget and Management allocates additional funds to cover cost-of-living adjustments for state employees, though no specific amounts have been committed.
“That’s something you’ll want to monitor as the budget moves forward,” Birch said.
Lawmakers also raised longer-range concerns about transportation funding, including a scheduled reversion in the share of highway user revenues allocated to local governments beginning in fiscal 2028 under current law.
Del. Thomas S. Hutchinson said the overall budget picture reflects a growing trend of shifting costs from the state to counties.
“Things are being pushed down to the counties more and more,” Hutchinson said. “I’m not seeing much here that makes me optimistic that next year will be better.”
Del. Sheree Sample-Hughes echoed the concern, saying she routinely highlights budget details line by line to ensure county impacts are not overlooked.
“These numbers matter on the ground,” Sample-Hughes said. “They affect services people rely on every day.”
Health care leaders also addressed the delegation, urging lawmakers to view state investment as critical to long-term access to care on the Shore.
Ken Kozel, CEO of University of Maryland Shore Regional Health, told lawmakers construction is advancing on the Regional Medical Center planned for the Mid-Shore. The state is in year four of a five-year, $100 million commitment to the project, he said, with the $20 million installment for the current year included in the governor’s proposed budget.
“We remain on track to open in the summer of 2028,” Kozel said. “That would not be possible without the support of this delegation.”
Kozel said private fundraising has exceeded expectations, topping $70 million toward a $100 million goal.
He also discussed Maryland’s new AHEAD model, which took effect Jan. 1, 2026, describing it as an effort to slow health care cost growth while improving population health through prevention and primary care.
“This is the right direction,” Kozel said, “but it’s challenging for rural systems that serve a high percentage of Medicare and Medicaid patients.”
Behavioral health, particularly for children and adolescents, resurfaced as a key concern. Kozel said Shore Regional Health is exploring whether to partner with TidalHealth rather than develop new inpatient capacity.
“Our intent is to keep patients on the Shore whenever possible,” Kozel said.
TidalHealth President and CEO Dr. Steve Leonard told lawmakers the system currently operates 16 child and adolescent behavioral health beds and said the unit was originally designed to serve needs across the Eastern Shore.
“The analysis included the whole Shore,” Leonard said. “Not just the lower Shore.”
Sample-Hughes asked whether the systems were discussing shared inpatient capacity at TidalHealth while expanding outpatient services in Cambridge. Kozel said those conversations are underway.
Leonard also emphasized workforce challenges, describing TidalHealth’s growing graduate medical education programs as a strategy to recruit and retain physicians in rural communities.
“If you train physicians in rural environments, they’re more likely to stay,” Leonard said.
Sen. Mary Beth Carozza pressed Leonard on immediate financial pressures, particularly involving insurers and Medicaid.
Leonard criticized what he described as inadequate physician reimbursement and disputes over denied payments for emergency department visits.
“When patients show up, we have to treat them,” Leonard said. “Then we sometimes have to fight to get paid.”
The meeting concluded with federal updates from staff to Rep. Andy Harris and Maryland’s U.S. senators. A congressional aide said Harris had sent a letter to the National Oceanic and Atmospheric Administration seeking an economic impact disaster declaration related to the fishery and had forwarded a delegation letter to the Administration.
The aide also said Harris wrote to the Food and Drug Administration and the Centers for Disease Control and Prevention seeking greater specificity in public communications about a Salmonella outbreak, arguing that broad warnings can harm the entire oyster industry. Another update noted the release of additional H-2B visas used by seasonal seafood processors.