Maryland Faces Potential Multi-Billion Dollar Settlements as Lawmakers Grapple with Budget Deficit
Maryland lawmakers were recently alerted to the massive financial risks stemming from lawsuits related to child sex abuse. As they work to address a $3 billion budget deficit, the state faces the possibility of paying billions in settlements tied to a 2023 law that lifted restrictions on lawsuits filed by survivors of childhood sexual abuse.
David Romans, a budget analyst with the Department of Legislative Services, presented a grim picture to members of the House Appropriations and Senate Budget and Taxation committees, warning that the state could be on the hook for hundreds of millions, potentially billions, of dollars in unbudgeted settlements. This is tied to the Child Victims Act of 2023, which, among other provisions, removed the statutory limits on claims related to childhood sexual abuse.
Romans, who was speaking at a committee meeting on January 20, emphasized that these potential liabilities could severely affect Maryland’s fiscal future, especially as the state already faces mounting budgetary pressure. The challenge? There’s no clear way to predict the exact financial toll.
Liability Could Push State’s Budget to the Brink
The potential cost of these lawsuits is troubling for legislators already tasked with balancing the state’s budget. Romans did not offer an estimate of the potential settlement value, given the complexity of the cases. The law has opened the door for claims going back decades, many of which involve state-run juvenile facilities dating as far back as the 1960s.
“The Attorney General’s office has employed outside counsel and they are negotiating with plaintiffs’ counsel,” Romans stated. “This is potentially an enormous liability to the state.”
However, many key factors remain unknown. One of the biggest uncertainties is the duration over which settlements may unfold. Could the state be forced to make payments over several years? Or could a quick settlement bring a lump sum of liability that dwarfs the budget’s current estimates?
A Damaging, Unpredictable Bill for Maryland Taxpayers
The legislative committees were warned that there’s no money currently set aside in the state’s budget to address this liability. In fact, the lawmakers were informed that the Attorney General’s office is negotiating with outside counsel to settle as many as 3,500 individual abuse claims.
While there’s no clear dollar amount yet, the concern is that this could trigger a series of unanticipated payments that could strain the state’s financial resources. Some lawmakers are already warning that the burden of these lawsuits could derail efforts to manage the state’s deficit.
Delegate Malcolm P. Ruff (D-Baltimore City) expressed deep concern, noting the magnitude of the financial risks. “It looks like several zeros,” he said. “A huge wrench in our plan here to balance this budget.”
Impact of the 2023 Child Victims Act
The Child Victims Act of 2023 was a game-changer for sexual abuse survivors, as it removed statutory caps on claims filed by individuals who had been abused as children. Previously, victims were limited in the amount of financial compensation they could seek, especially for non-economic damages like pain and suffering.
The law specifically caps state liability at $890,000 per occurrence, though it raised the ceiling for private entities like the Archdiocese of Baltimore. Non-economic damages for private institutions could reach up to $1.5 million. But the law’s vagueness in defining terms like “occurrence” makes the potential scope of the damage even more unclear.
Is each individual act of abuse an “occurrence,” or can multiple incidents be grouped under a single occurrence? If the latter, the state could face a much more manageable financial risk. However, if each act is treated as a separate incident, the total financial liability could be much higher than expected.
What’s at Stake for Local Governments?
Even if Maryland’s state-level settlements fall within the expected range, local governments could face separate lawsuits. The 2023 law’s provisions apply to state-run entities, but municipalities and counties could be next in line to deal with their own claims. This raises the stakes even further, as local governments would need to find the funds to handle the liabilities they face.
The number of claims that could potentially be filed is still up in the air. Although analysts estimate up to 3,500 claims against state agencies, the actual number could be much higher once private institutions and local governments are included.
A Timeline of Uncertainty
As negotiations continue, the unpredictability of the situation looms large. The Attorney General’s office has declined to comment on the progress of the talks, citing the ongoing nature of the negotiations and litigation. But it’s clear that Maryland legislators are facing tough decisions ahead. The combination of balancing a multi-billion dollar deficit with potentially massive payouts for abuse survivors could test the state’s financial system in ways that no one anticipated.
As 2025 progresses, the state’s leaders will likely be under increasing pressure to act quickly. With no set amount for settlements yet, and with outside counsel involved in negotiations, the final costs may be even higher than initially feared.
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