Following happy visits with many delighted children at his Fountain Park house on Saturday, Dec. 7, Santa Claus presented 150 pairs of new socks to Paul McDonald, President of the Chestertown Lions Club. Santa proudly noted that “his elves had been furiously knitting them for months. They will be happy to know the cozy warm socks are going to good homes!”

Every year the Chestertown Lions Club’s Christmas Socks program distributes small gifts with hand-signed cards to men and women who live in local nursing and retirement care facilities. This year the socks are being delivered to the Resorts at Chester Manor and Chestertown Nursing & Rehabilitation.

This year the Christmas Socks program is led by Lions Club member Jim Bogden (a very close friend of Santa’s), with guidance from Lion Mary Lou Pagella, who ran the popular program for several years.

The Chestertown Lions Club strives to promote the principles of good government and good citizenship, take an active interest in the civic, cultural, social and moral welfare of the community, encourage service-minded people to serve their community without personal financial reward, and to encourage efficiency and promote high ethical standards in commerce, industry, professions, public works and private endeavors. For more information on the club or to become a member, please visit www.Chestertownlions.org

Efforts to bolster Maryland’s flagging economy and ease projected budget deficits may hinge on improving the state’s transit and road systems.

But the fund that pays for roads and transit is projected to have a more than $1 billion shortfall over the next six years, and lawmakers will return to Annapolis next month facing the prospect of “enormous” deficits in other parts of the budget.

That was the challenge laid out recently at a conference of state officials and business leaders, who said efforts to grow the state’s economy may depend on improving the state’s transportation system.

“Investing in Maryland’s transportation network will make the state more attractive to business,” said David Smith, head of government affairs for Martin Marietta, during the symposium last month held by the Maryland Chamber of Commerce.

A debate about tax increases that began earlier this year is sure to resume when the General Assembly convenes in January. Gov. Wes Moore (D) and Senate President Bill Ferguson (D-Baltimore) have so far rejected broad-based tax increases, favoring a focus on growing the state’s economy.

But the state’s economy is stagnant. The operating and Transportation Trust Funds are in the red.

Smith pointed to a July CNBC ranking of top states for business, in which Maryland ranked 31st overall and 37th for infrastructure. By comparison, Virginia ranked first overall and third for infrastructure. Pennsylvania ranked 17th overall and 20th for infrastructure.

Del. Marc Korman (D-Montgomery), chair of the House Environment and Transportation Committee, said employers “want to be near transportation that works.” But even the systems already in place in the state are struggling.

“A great example is the Light Rail system in Baltimore City, which is being held together by MacGyver with duct tape and chewing gum,” Korman said. “It could be a really great transit option for lots of businesses, if you get it working and get better service again. So, if we can create those opportunities around the state, we’re in a great position.”

Maryland faces an “enormous” projected operating budget deficit. Recent estimates predict the gap between revenue and spending will be $2.6 billion in the coming fiscal year, and approach $6 billion by fiscal 2030.

“Budget deficits are an inherent reality of government,” Lt. Gov. Aruna Miller (D), told attendees of the half-day conference. “Make no mistake on that. In fact, 18 of the past 21 state budgets had built-in deficits, underscoring the balance between making critical investments and maintaining fiscal responsibility.”

Much of the gap, especially in the out years of the Department of Legislative Services projections, is driven by higher costs of the education reforms in the Blueprint for Maryland’s Future.

Coupled with the operating budget gap is another, more than $1 billion, gap over six years for transportation projects.

Any solution for transportation funding would have to come with solutions for paying for the costs of the Blueprint, according to Korman.

“I know, at least speaking for my colleagues in the House of Delegates, if I can be so bold, that is a big issue,” Korman said. “We are not interested in solving one very important part of our economy, which is transportation, but not another, which is education. And so, these things all have to be done together.”

A derailed TRAIN

Earlier this year, when the House and Senate clashed over tax plans, the House wanted to abolish the Transportation Revenue and Infrastructure Needs Commission —  the TRAIN Commission — before the panel handed over a menu of options to modernize the Transportation Trust Fund.

Instead, the two chambers dissolved the original 31-member panel and reconstituted it as two panels: A smaller commission that would author a final report by January and a second, larger panel composed mostly of advocates, to advise the commission.

Lawmakers called on the panel to deliver a final report before the 2025 session, but that’s unlikely to happen. Members of the two new panels have not been announced. The groups have yet to meet, and the window for meeting is closing as the holidays approach.

Frank Principe, chair of the original commission, said solutions will require the governor and legislative leaders to reach some consensus on options.

“I think that the low-hanging fruit is pretty limited,” Principe told the chamber audience. “The bigger changes and needs for resources that we’re going to need to get to where we want to be requires us to make bigger and bolder steps. And I think that’s just political will to do that.

“The TRAIN Commission is more than happy to create menus of options and opportunities for conversations around what we need and what could potentially bring the resources that the department needs to be able to move on projects that we all agree need to happen,” he said. “But that really starts at the top. Without that direction, it’s going to be hard for us to get us where we need to be.”

Miller and others are looking to Principe’s panel for options.

“Currently, yes, we do have a funding shortfall that is driven in part by many different factors, including the less-than-expected revenue for the state gas tax, reduced federal funding and an end to the federal COVID-19 aid and increased construction costs,” Miller said. She said the TRAIN Commission, is making recommendations to stabilize funding.

Modernizing the Transportation Trust Fund will likely rely on several options working in concert with each other, according to Cinzia Cirrillo, director of the Center for Multimodal Mobility at the University of Maryland.

“So, there are ways that have been adopted to supplement the revenue for transportation,” Cirrillo said. “And as I tell my students all the time, in transportation, one solution is not going to work. It’s a bundle of solutions that will help raise the money that we need in transportation. And unfortunately, for transportation projects, you need a lot of money.”

Principe said there are “more choices to be made than resources that are available,” when it comes to a menu of funding options.”So, at the end of the day, we’re going to have to figure that out.”

Regional authority, local responsibility

There is plenty to figure out.

“I think that the key question is, do we want to stick with our current statewide model, or do we want to shift to regionalization?” Korman said. “I think that’s a pretty big conversation.”

But Korman said regionalization comes with a different cost for local governments.

“I think realistically, if the state was going to hand the counties additional authority, it would probably hand them additional responsibilities,” Korman said, adding that state officials would “not just give away taxing power without asking them to take on obligations.”

Other solutions could include regionalized taxes based on proximity to transit systems in the area, according to Korman.

Another possibility that is fraught with potential problems is a tax based on miles traveled — a vehicle miles traveled tax. Four states are currently piloting such programs.

Currently, the majority of transit and road projects around the state are paid for through the Transportation Trust Fund, a dedicated account funded by various registration fees and taxes, with most of its funding coming from the state’s motor fuel tax.

The state started 2024 with a proposed six-year plan that cost $3.1 billion more than the fund could support. Transportation Secretary Paul Wiedefeld later revised that projection to a smaller — but still sizable — $1.3 billion over the six years.

“There’s these tremendous pressures on the state’s revenue sources,” Wiedefeld said. “I think there’s a much greater understanding of that.”

The lack of money means projects requested by the state’s 24 political subdivisions could be delayed or even paused indefinitely.

“The problem we have is whether you’re like me and want to see three Purple lines, or like some of the other folks here and want to see three new Beltways, American Legion Bridge improvement with the Red Line … or a new Bay Bridge — whatever it is you want to see, we don’t have enough money for any of it. That’s obviously the challenge before us,” Korman said.

By Bryan P. Sears

– Maryland Matters reporter Bryan P. Sears was an uncompensated moderator of a panel during the Maryland Chamber of Commerce transportation symposium.

The community at large is once again invited to the annual “Feast of Love” Dinner on Christmas afternoon at 1pm, this year held at Christ United Methodist Church.  Welcome to any and all who wish to feel the warmth and fellowship of the festive season.

The folks at Christ First Methodist and a score of neighbors from throughout the County, have, for almost four decades, opened their doors and hearts on to provide nourishment for body and soul, assuring that on a day of celebration, no-one need feel alone.  It has become a special tradition both for those that come to the meal and for the volunteers to enjoy the camaraderie and cheer that makes Christmas so special.

The annual tradition was founded in 1984 by Yvonne Arrowood, (carried on for many years by Janet Sigler) and now by Yvonne’s son, Bill Arrowood, the festive fete serves as testament to spirit of service in our community. “When my mom started The Dinner, (as we have come to refer to it in our house), back in the 80’s, I was just a kid, so this is just what Christmas has always been for me, spending the holiday at the church with a whole room full of strangers who would become friends.  Seeing the same folks year after year come together, sharing a few hours, with a simple meal, is an enormous blessing and one of the things that has kept me grounded, both to Chestertown, and in my whole life. It taught me that we all can find a way to serve wherever you can, even if just a little, even if for a day.”

The bountiful holiday spread includes roast turkey, (cooked every year by Jeff Carroll at the FishWhistle at the Granary), vegetables with all the trimmings, and a plethora of pies and desserts, (provided by Lapp’s Family Bakery), and even a birthday cake to make the special celebration complete. The only charge for the fine fare is to come prepared to share a festive spirit with friends old and new. Singing and cheer abound, as is a genuine opportunity to witness that Chestertown isn’t merely a small town but actually, one very large family.

Reservations are not required, but for anyone interested in coming, (especially larger groups and families), we ask you to please call and leave a message at (410)-778-0911, so that we may know how many to expect. If you know anyone who needs to be personally invited or picked up, we can try to make transportation available for them with advance notice.
There is only one seating for the day, and the dinner is usually done serving by 2:30pm.

The church is located at High & Mill Street in downtown Chestertown and the entrance for the dinner is on the Mill Street side of the church.

If you would like to volunteer, you can call Bill Arrowood @ (215)-431-6671, email [email protected] or
sign up at www.perfectpotluck.com, and sign in with the hostname: “arrowood” and log in: “1225”.

Oyster harvesting in Maryland’s Chesapeake waters on public bottom opened for the 2024-2025 season on Oct. 1. Hand tongers got the first crack at this year’s crop of market-size oysters since the season for power dredging doesn’t open each year until Nov. 1. The open season continues until March 31, 2025.

There’s nervousness on the water because the new season opens against the backdrop of two wildly different past two seasons.

According to state statistics gathered from oyster buyers up and down the Bay, Maryland’s watermen harvested and sold 722,850 bushels of oysters during the 2022-2023 season with an estimated dockside value of $31,241,577. The following 2023-2024 season’s numbers showed a harvest of 437,536 bushels with a dockside value of $15,528,786, a dramatic decrease.

Curiously, despite a large increase in the number of individuals reporting catches in the 2023-2024 season compared to the season before – 649 vs. 415 – the results in bushels harvested and their dockside value were much lower. It turns out that the high harvest and sales in the 2022-2023 season, that drew so many more individuals into the harvesting the following year, was an outlier.

Relative to the recorded harvests over the past 25 years, the 2022-2023 harvest represented a huge spike. A radically fluctuating market appears to be the dominant factor.

The decline the following year didn’t occur because the volume of oysters in the Chesapeake went down. Strong spat sets over the past few years have resulted in expanding oyster populations. Rather, problems in Gulf of Mexico oyster populations that led to harvesting moratoriums led to greater demand for Chesapeake oysters in that strong 2022-2023 season.

With the Gulf oyster industry back online during the season just past, demand for Chesapeake oysters along the East Coast declined, especially after the typically strong holiday season. In January, February and March there were many weeks when buyers only had a market two or three days.  Instead of harvesting five days a week as permitted by law, watermen had to stay home when there weren’t market days.

Jeff Harrison, a waterman and president of the Talbot Waterman Association, said things weren’t so great for Maryland oystermen last year and he expects the same for this new season. “We’re getting $35 per bushel this year.  That’s the same as we got 25 years ago. It might go a little higher before Christmas but not much.  The biggest thing is the market. It’s not what it was and we’re not sure why.  There’s lots of oysters out there.  The spat set in Broad Creek is amazing again this year, possibly because of the sanctuaries where the state’s putting oysters and prohibiting harvesting. And it’s not the quality of the oysters. The quality is as good as I’ve ever seen. It’s a good time to be eating oysters. I think the shuckers are getting two to three pints of oysters more per bushel than they were last year, but we’re still only getting $35 per bushel.”

Harrison said this year’s crab market was also soft.  “Everything hit great around the Memorial Day holiday.  Best ever. We were getting $200 per bushel and there were plenty of crabs around. Making good money.”

But then, he said, the market softened through the summer.  “The crab volume went down when they spread out from the creeks. We weren’t catching as many and the price also started going down.  By the fall, when the crabs are the fattest and the best, the price at the dock for us had dropped to $70 per bushel for number ones.  It’s been a long time since we got that little. Better product and less dollars, for the oysters and the crabs. It doesn’t make any sense.

 “Apparently, the same thing’s going up and down the coast,” he said. “Lobstermen and shrimpers are saying they’re not getting any real money either.  And 85 percent of our seafood still comes from overseas. Why don’t people want to buy local seafood and pay for it?  Maybe it’s the economy. I don’t know. But something’s going on.”

Chris Judy, director of Maryland’s Shellfish Division, tried to inject a dose of reality into the situation with a touch of the positive. “From what we hear, this season’s catch is down, but note that even if it ends up at about 400,000 bushels (compared to the earlier 722K or 437K) this is still a strong harvest compared to the trend of the prior decades.”

Watermen harvest oysters by hand tonging, dredging under sail and power on skipjacks, diving and hand picking from the bottom, and using hydraulic-powered patent tongs for working deeper water bars. Dredging the bottom under power with typical workboats has become the most popular and efficient method.

Dennis Forney has been a publisher, journalist, and columnist on the Delmarva Peninsula since 1972. He writes from his home on Grace Creek in Bozman.

State lawmakers will return to Annapolis in January facing a widening structural budget gap that analysts said is on track to become one of the worst fiscal situations in two decades.

One-time fixes including tapping available cash in the Rainy Day Fund could ease the pain, lawmakers were told Tuesday, but doing so could leave the state at risk for an array of other concerns, including a recession.

“The overarching takeaway from today’s meeting is that there’s an enormous gap between the ongoing spending commitments the state has made and ongoing revenues,” said David Romans, a Department of Legislative Services budget analyst, in a presentation for legislative fiscal leaders, including members of the Joint Spending Affordability Committee.

Romans said that in just five years, the state will face “a significant challenge” in paying for those commitments.

“By fiscal 2030 — the final year of our forecast — we are showing the state will only have enough revenue to cover 84% of the expenses we’re projecting the state to incur,” Romans said. “That is the largest gap that we have seen in the last 20 years. It is more significant than the Great Recession.”

In fiscal years 2008 and 2009, during a deep recession, budget projections said the state was on track to have only enough revenue to cover 89% and 87% of its ongoing spending, according to the Department of Legislative Services.

Maryland faces more than $1 billion in combined structural and cash deficits in the current year. That gap more than doubles to $2.7 billion in fiscal 2026 and 2027.

By fiscal 2028, the state will exhaust the money set aside to cover the costs of education reforms, and will require money from the general fund. The structural deficit grows to nearly $4.7 billion in 2028, then $5.2 billion a year later, and again to $5.9 billion in fiscal 2030.

Senate Minority Leader Stephen S. Hershey (R-Upper Shore) called the outlook “pretty dismal.”

“A $2.7 billion deficit is not something that, unfortunately, … you can just make up with cuts,” Hershey said. “I hope that you can, but that’s a pretty big gap. It makes it very concerning that the governor and General Assembly are going to have to raise taxes. I’m hoping that’s not going to be the case, but I’m not sure how they can close that gap.”

Tuesday’s briefing was a stark reminder of budget pressures facing Gov. Wes Moore and a legislature controlled by Democrats.

An impasse between the House and Senate earlier this year led to a budget compromise that failed to fully address concerns. House leaders wanted a $1.3 billion tax and gaming proposal, while Senate leaders opposed broad-based taxes in favor of targeted increases. The result was a projected $1 billion structural deficit — the difference between expected spending and revenues — for fiscal 2026 .

By July, those budget concerns were growing.

Moore proposed $150 million in budget adjustments this summer that were billed as cuts, but in reality reduced spending in several state agencies that was then shifted to cover costs of growing Medicaid enrollment and the state’s child care subsidy program.

Multiple legislative sources said in July that Medicare spending alone could add $800 million to the projected deficits.

Moore and Senate President Bill Ferguson (D-Baltimore) said this summer that they had a “high bar” for any tax increase. Moore also warned county officials in August of the likelihood of tough budget decisions.

It comes as recent polling shows Marylanders are still feeling pinched economically. The issue was top of mind for many voters in Maryland and nationally during last week’s election.

A spokesman for Ferguson said the Senate leader would have a comment on the fiscal briefing soon.

A stagnant economy

Over the next five years, ongoing expenses in the state budget are projected to grow at 6% annually, while revenues are projected to grow at around half that amount, legislative analysts said Tuesday.

Maryland’s economy remains stagnant: The Board of Revenue Estimates said in September, in a first look at expected revenues for fiscal 2026, that taxes and other funds flowing to the state would grow by 0.9% over the current fiscal year.

“We have not seen a lot of employment growth,” Romans told lawmakers. “We do have very low unemployment, but we’re just not seeing much employment growth, and that’s suppressing our revenues a little bit.”

Coming state budgets will have to absorb billions in additional costs for education reforms in the Blueprint for Maryland’s Future. The state also faces higher-than-expected costs for Medicaid, driven by inflation and increased enrollment, and greater demand for the state’s childcare subsidy program.

“So, all those additional spending pressures are leading to spending growing much faster than the revenues,” Romans said.

“Significant long-term solutions” needed

Moore and lawmakers could draw down on the state’s Rainy Day Fund. At $2.5 billion, the cash in the account is twice the statutory requirement of 5% of annual revenues. Taking half the fund would cover the gap projected for the current year and a portion of fiscal 2026.

The state could also suspend a requirement to set aside hundreds of millions to hedge against revenue volatility, and it could shift $250 million in cash to the deficit and opt to borrow money to pay for the already approved capital projects.

“If you did those three things, you can get through fiscal ’25 without any really difficult decisions, and you solve roughly half the fiscal ’26 problem,” Romans said.

Those moves are not without risk, however.

First, Romans said Moore and lawmakers still face “an enormous problem in ’26 and it grows dramatically by (fiscal) ’28.” That problem likely will require “significant long-term solutions.”

Those include cuts to spending or increased taxes or both.

“You’re not going to be able to just use the cash resources the state has to manage our way out of the problem,” Romans said.

“This budget problem is not being driven by a recession,” he said. “It’s being driven by a somewhat stagnant economy and by our spending ambitions.

Advocates renew push for $1.6 billion tax plan

The cash options are a one-time fix.

“So, if you use the Rainy Day Fund and you get rid of the revenue volatility, you’re eliminating two of the things that you sort of can rely on during recession to help mitigate the impacts of a recession,” Romans warned.

“I would be cautious in using these strategies without having a longer-term plan to solve the budget problem, because if we were to fall into a recession in the next few years, you would have very few options left to deal with it, other than making substantial cuts.” he said.

Advocates for a broad-based tax package proposed earlier this year seized on the briefing to renew calls for their plan.

“Now is the time to fix our tax system and ensure we have the revenue we need to fund the education, health, and public safety programs that make our communities stronger,” Fair Share Maryland, a coalition of 40 organizations, said in a statement Tuesday. “The Fair Share Maryland plan reforms the state’s upside-down tax system that currently gives unfair tax breaks to large corporations and the ultra-rich.”

Advocates said the plan, as introduced in January, cobbled together a number of proposals from earlier, failed legislation. The largest revenue source — $576 million a year — would come from closing what advocates called “corporate tax loopholes.” That includes counting corporations and their subsidiaries as one entity for tax purposes, preventing corporations from moving profits from one state to another state or country with a lower tax rate.

“Maryland leaves hundreds of millions of dollars on the table each year it fails to close corporate tax loopholes,” the group said. “Our state policies also allow the wealthiest 1% of households in Maryland to pay a smaller share of their income in taxes than anyone else. This puts the burden for public services on working families and our small businesses.”

The bill also included an increase in taxes for residents earning $1 million or more annually, as well as a 1% surcharge on capital gains.

“We can build a durable and resilient economy by righting our state’s tax code,” the group said. “Maryland can also raise $1.6 billion in revenue each year to support good schools, health care, transportation, and the state workforce needed to deliver high-quality services. Doing so will also cut taxes for more than 1 million Marylanders with a family income of $65,000 or less.”

But the deficits projected 10 months ago were smaller. It is unclear how much the Fair Share plan would cut into the current projections.

Possible Trump effect looms

None of the projections outlined Tuesday included potential changes as the result of the 2024 presidential election.

President-elect Donald Trump has vowed to purge federal employees and move federal agencies outside the Washington, D.C.,  region. Montgomery County Executive Marc Elrich said last week that he ordered a review of potential impacts to the county budget, but predicted there would also be consequences for the state.

There are also concerns about funding for the replacement of the Francis Scott Key Bridge and the relocation of the FBI headquarters to Prince George’s County.

One proposed project important to Moore – the Red Line rail system — was not mentioned. But Hershey said he does not believe the Trump administration will ever fund the east-west transit line.

“I think honestly, with the Trump administration coming in, essentially, for all intent purposes, the Red Line is dead,” Hershey said. “We’re not going to see federal funding for that.”

Maryland receives about $19 billion annually in federal aid. That’s in addition to the 256,000 residents – about 8% of all state taxpayers — who received some form of federal wages or pension payments in 2021, according to the Comptroller’s Office.

The economy could also take a hit if Trump follows through with other proposals, including mass deportations and tariffs that analysts worry could trigger inflation and recession.

“We don’t have any real way to model what they might propose to do, and a lot of those sort of things will require congressional action, so we’ll certainly be monitoring that,” Romans said. “There’s certainly a significant risk to our economy.”

By Bryan P. Sears