Around the same time on Monday that President Donald Trump was announcing a hiring freeze for civilian federal employees and promising within 90 days to institute a “long-term plan to reduce the size of the federal government's workforce through attrition,” Maryland's non-partisan legislative analysts were kicking off their annual presentation on the governor's budget plan. The coincidence of timing underscored a worrisome fact: Although Gov. Larry Hogan proposed a rate of spending growth below that of state revenues for fiscal 2018, Maryland faces billion-dollar shortfalls within a few years — assuming the federal spending that is the linchpin of the state's economy doesn't evaporate.

Governor Hogan's efforts to contain costs in the state budget were not, as he initially suggested, without any sacrifice. As we've noted before, efforts to help Baltimore recover from the 2015 riots were virtually wiped out in the governor's plan, and a cut of $15 million previously promised to help keep Prince George's Hospital running while a new facility is built has stirred anger among the leaders in the General Assembly. We expect a major push to reverse those decisions, which requires legislators to find other areas to cut and/or dip into the $144 million in fund balance Mr. Hogan's proposal theoretically leaves behind.

We say “theoretically” because the recent trend in Maryland has been toward revenue estimates that prove overly optimistic. Given the uncertainty related to federal spending and support for the Medicaid expansion under the Affordable Care Act, lawmakers would be wise to err on the side of caution.

There is good news in that the budget analysts agree that Mr. Hogan did achieve, for one year anyway, what is known as “structural balance” — that is, ongoing spending does not exceed ongoing revenues. The bad news, though, is that unless something changes, it will be a blip on the way to a cumulative projected shortfall of $2.9 billion over the subsequent four years. And given that Maryland's economic growth flatlined during the federal budget sequestration during the Obama administration, Mr. Trump's plans to dramatically reduce the size of the federal government may make those numbers a best-case scenario.

Mr. Hogan has again proposed legislation to tie mandated spending growth to increases in state revenues. His idea is that such spending grows by the amount specified in statute or 1 percent less than the growth in General Fund revenues, whichever is lower. (Some key areas like K-12 education would be exempted.) That makes somewhat more sense than his proposal last year, but it still treats all mandates as equally necessary, and given that education makes up the lion's share of mandated funds, the legislature's chief budget analyst called it “fundamentally weak” in his briefing Monday.

Cutting education isn't the answer, but we would welcome a comprehensive review of the rationale for and results of various mandates in state spending, similar to the one Mr. Hogan has embarked upon regarding state regulations. Among other things, it is worth asking whether attempts to catch back up to the levels of spending various programs saw before the Great Recession is wise.

It may also be time to re-evaluate the number and timing of step increases built into the state employee salary scale and the assumption that workers will get cost-of-living increases every year. Mr. Hogan's budget proposal saves almost $128 million by eliminating such raises next year. We recognize that altering that expectation would be a blow to state employees, but it's one their counterparts in the private sector generally absorbed long ago.

On the whole, we agree with Governor Hogan and the leaders of the General Assembly that tax increases aren't the answer to Maryland's budget problems, but it also goes without saying that lawmakers should be extremely reluctant to enact tax cuts. Even the relatively modest reductions Mr. Hogan has proposed would balloon the projected four-year shortfall from $2.9 billion to $3.4 billion.

That said, there may be opportunities to reform the tax structure so that it aligns more closely with the state's modern economy. The governor and legislative leaders are now acknowledging the folly of relying too heavily on volatile capital gains taxes to fund ongoing operations, but they should also recognize that a sales tax built for a 1950s economy is ill suited to 2017. Efforts to expand the sales tax to cover services have gone nowhere in the past, but if combined with a lowering of the rate, it could be accomplished in a way that is revenue-neutral in the short term, makes the levy more progressive and provides for better long-term growth.

Comprehensive spending and tax reform would be a heavy lift, particularly as the 2018 election approaches. But Governor Hogan and the Democrats in the legislature showed that they can navigate thorny issues in a bipartisan fashion when they enacted criminal justice reform last year. Mr. Trump's election and the disruption he portends for Maryland's economy may just give them reason to do it again.