A nearly $3 billion state budget deficit darkens the Maryland General Assembly’s opening day, as lawmakers return to Annapolis Wednesday for their 90-day legislative session.

The looming fiscal gap threatens hard-won investments in education, child care and transportation, among other initiatives.

In addition, the Trump administration takes office in two weeks and has already floated policy changes, such as relocating federal jobs away from Maryland and cutting key benefits programs, like Medicaid, that could further weaken the state’s slow-growing economy.

Democratic leaders, including Gov. Wes Moore, say they’re poised to make tough budget choices, but haven’t yet determined the mix of spending cuts and tax hikes they’ll use to cover the spread. Those debates over what programs the state will cut and who it will tax — one year before they’re all up for reelection — are sure to consume Annapolis and likely overtake the legislative session.

Moore has yet to roll out his policy priorities, but he’s scheduled to unveil his budget proposal on Jan. 15.

“At the end of the day, I think it gives us an important opportunity to really have hard conversations about: How do we invest in Maryland the right way, to keep us competitive and invest in things that will build our economic future?” Senate President Bill Ferguson said in a December news conference.

Both he and House Speaker Adrienne A. Jones said they’ll aim to preserve key investments in education and health care and ease financial burdens on Marylanders despite the stark fiscal realities.

“We are not going to throw 50,000 people off of Medicaid,” Ferguson said. “We are not going to throw 20,000 families out on the street to not have child care subsidy credits.”

Cuts will be made in other places, he said, without going into detail, but those alone won’t bridge the gap.

“We are going to have to look at revenues in certain areas,” the Baltimore Democrat said.

Proposals have been floated to raise more money by changing corporate tax laws, increasing taxes on high earners, taxing services and legalizing internet gambling.

And on the side of spending cuts, there’s been talk of reevaluating how well government programs are working and slowing planned growth. Republicans want to look at putting the brakes on programs that have been recently created but not fully implemented.

No matter how they solve it, the state is legally required to pass a balanced budget each year.

Maryland Republicans have warned for years that government programs were growing at a rate that can’t be supported by the taxes and other revenues that are coming in.

”We have too many systemic plans that cost more money than what a state of 6 million people with a sluggish economy can afford,” said Del. Jason Buckel of Allegany County, the House minority leader.

Buckel said Republicans will keep a close watch on any proposals from Moore or lawmakers that would raise taxes or fees on Marylanders.

Beyond the budget, lawmakers say they’ll battle the state’s climbing energy costs, look at how they can stretch education dollars and navigate federal policy changes as they occur.

Hundreds of bills have already been filed in both chambers. Some proposed include measures governing elections, protecting in vitro fertilization, restricting cellphone use in classrooms, deciding parole for aging or ill inmates and an early talker — a resolution to exonerate witchcraft. The measure proposed by Del. Heather Bagnall, an Anne Arundel County Democrat, would absolve those accused or convicted of witchcraft prior to the American Revolution and will apologize to their descendants for any resulting hardships.

Here are some of the other big ticket items to watch:

Ferguson: Budget woes not from spending

Lawmakers have known for a few years that the state would soon face a budget crossroads, but chose more targeted revenue boosts, like additional fees, last session.

The education reforms are not to blame for the immediate budget woes, Ferguson said. Next fiscal year’s deficit occurred because the state underestimated how much it would spend on social programs, such as health care for incarcerated people, services for people with developmental disabilities and child care subsidies, he said.

“It is not because of inappropriate spending in any way,” the Baltimore Democrat said.

The state’s transportation budget also does not have enough money to pay for the planned projects, from routine road and bridge repairs to ambitious plans such as the proposed Red Line, an east-west transit route in Baltimore. The ability to get federal transportation money is clouded with Republicans controlling federal spending, and Ferguson said the priority will need to be on maintenance over new projects.

Lawmakers from both parties anticipate the budget solutions to include a mix of spending cuts and new taxes.

Maryland residents oppose raising taxes to make up the deficit, according to a poll out Tuesday by Gonzales Research and Media Services.

Jones: Education cuts have ‘high bar’

One factor contributing to the state’s long-term budget crunch is the Blueprint for Maryland’s Future, an ambitious and expensive plan to improve public schools. There’s enough money to pay for the reforms aiming to improve academic performance and raise teacher salaries, among other initiatives, through 2027.

But beyond that, as more Blueprint programs are put into place, the fund falls short of the projected expenses. In the 2028 budget year, the Blueprint fund would be about $2 billion short, a gap that’s expected to grow in future years, according to state analysts.

Democrats have fiercely defended the Blueprint against suggestions it needs to be scaled back, and Jones said cuts must meet a “high bar.”

But Moore has hinted he’ll revisit the multiyear investment and has already warned a measure allowing teachers added out-of-classroom planning time could face a trim, as it requires more staff to cover time away from the classroom.

Buckel said the state does need to make “meaningful adjustments to the Blueprint,” perhaps by scaling back high-cost elements of the plan that aren’t directly related to improving student performance.

Energy affordability a priority

Maryland’s retirement of coal and gas power plants has decreased the state’s electricity supply, at a time when demand is rising. The imbalance has hiked prices and hit consumers right in the wallet.

Senate Minority Leader Stephen Hershey predicted that, after the budget, energy issues would be the next most important issue in Annapolis. Democratic policies that push the electrification of cars, appliances and more will only make the situation worse, Hershey said.

“They’re putting policies in place that you have to use more and more electricity, but they don’t have an answer of how to effectively and reliability provide that,” he said.

The challenge for lawmakers, Jones said, lies in increasing output and protecting the environment. She said she expects a joint-chamber effort on making energy more affordable.

Related, and sure to make an appearance, is the tense battle over a 70-mile power line planned to stretch through Baltimore, Carroll and Frederick counties, called the Maryland Piedmont Reliability Project. It’s intended to meet the demands of data centers in Northern Virginia.

The project’s developers angered Maryland residents and some lawmakers by planning the route with little community input. The overreach unwittingly built a bipartisan coalition in opposition and spurred Moore’s demand for more community involvement.

Maintaining health care programs

With the possibility that the incoming Trump administration will target the Affordable Care Act, former President Barack Obama’s signature health legislation, the state needs to “fiercely guard our health care dollars,” Jones said.

“I understand the importance of the budget as a tool to protect our most vulnerable Marylanders,” Jones said.

Also under consideration is the next step in the state’s ongoing efforts to cap prescription drug costs.

State law already limits how much state and local government pays for certain prescription drugs included in employees’ health care plans.

Moving forward, Maryland may try this year to expand the power of the Prescription Drug Affordability Board — which sets those caps — to limit prescription drug prices for all employers’ health care plans.

With Trump comes uncertainty

As lawmakers get to work in Annapolis, they’ll be looking down the road to Washington and the unpredictable nature of President-elect Donald Trump.

“We don’t know what will be coming from the federal government,” Jones said. “So we need to look at all our options to keep the commitments we made.”

When there’s a curveball, though, Jones said the way forward is for both chambers to unify behind one solution.

Members of Trump’s inner circle have floated cuts to crucial programs that help low-earners meet their basic needs, such as Medicaid — which serves around 1.8 million Marylanders — food benefits and child care.

A sizable chunk of Maryland’s cash flow for such programs comes from the feds.

Trump allies who favor closing or depleting the U.S. Department of Education have been put in charge of streamlining government.

“When it comes to the independence of our public education system, we will protect our students from a federal agenda that will harm the most vulnerable students to score cheap political points,” Jones said.

Trump has said he would claw back unspent funds earmarked under landmark climate and infrastructure laws passed under the Biden-Harris administration. Republican leaders say they’re doubtful Trump would squash infrastructure projects.

The Senate president met with Maryland’s lone Republican Congressman Andy Harris, who Ferguson said has been “navigating” the incoming administration to see what changes may be afoot. Ferguson said he’s gathering information “to make the best decisions on behalf of Marylanders.”

“Even if it’s bad news, certainty is better than uncertainty.”