The updated projections for the state Board of Revenue Estimates cut another $280 million from the state’s revenue projections yesterday, warning of an impending “unnecessary negative shock” to the state’s economy driven by expected federal budget and employment cuts. The updated projections — lower than in December — come amid increased concern about federal budget and employment cuts and a looming potential shutdown. The board’s cut in projections over two years includes a loss of nearly $400 million in personal and corporate income taxes over two years, offset by small gains in other areas.
Federal reliance: There are roughly 161,000 federal employees in the state. In tax year 2023, 252,000 households reported some form of federal wages, accounting for about 9 percent of total gross income. “No matter who has been in the White House, economists have warned for at least 20 years that our economy is too dependent on federal jobs. Despite repeated calls for economic diversification, Maryland remains highly dependent on federal employment, contracts and grants,” said Senate Minority Leader Stephen Hershey.
