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Impact of Federal Spending Cuts in Maryland: A Comprehensive Analysis

The recent collaboration between the Comptroller of Maryland and the University of Maryland's Robert H. Smith School of Business has yielded an insightful analysis regarding the profound effects of federal job and spending cuts on Maryland's economy. This analysis is a follow-up to a previous report discussing the influence of federal employment and expenditure on the local economy and examines specific reductions stemming from the Department of Health and Human Services (HHS) and the United States Agency for International Development (USAID).

Key Findings of the Report

The economic landscape of Maryland heavily depends on federal activity, with previous figures indicating that in FY2024, the federal government allocated an astounding $150 billion to the state, supporting over 229,000 jobs. The most recent analysis, published on January 13, 2026, delves into the anticipated repercussions of reductions that began during the latter part of the Trump Administration. The focus is particularly centered around HHS’s significant budget cuts and workforce reductions that threaten Maryland's job market.

In FY2024, HHS contributed a remarkable $30 billion to Maryland’s economy, directly supporting 40,749 jobs and employing over 35,000 citizens. With the announcement of workforce reductions at HHS subagencies including the National Institutes of Health (NIH) and the Food and Drug Administration (FDA), the report projects a staggering loss of approximately 2,919 jobs, impacting residents across Anne Arundel, Baltimore, Howard, Montgomery, and Prince George’s counties.

The USAID Factor

The findings also illuminate the significant role of USAID in Maryland's economic fabric. Prior to cuts, the agency injected $548 million into the state economy, supporting 1,213 jobs for state residents. Additionally, with the presence of USAID’s private contractors in associated states, the report estimates a further loss of around $502 million in wages across 3,700 out-of-state workers regarded as having connections to Maryland.

Yet another dimension of analysis concerns the planned closure of the U.S. Department of Agriculture's research center, which — despite its recent reversal — would have had an impact of nearly $200 million in annual spending and hundreds of jobs moving out of state. This aspect brings to light the ongoing negotiations and impacts concerning federal operations and how quickly decisions can alter economic forecasts.

A Call to Action

Comptroller Brooke E. Lierman expressed concern over these developments, noting, "The Trump Administration’s spending cuts and workforce reductions have been incredibly short-sighted. An estimated 25,000 federal workers lost their jobs in Maryland through November alone – forcing thousands of families into financial uncertainty."

This report outlines the expansive reach of federal policy decisions, regardless of their intention. Each job lost translates into instability for families and impacts local businesses reliant on federal employment.

The Dashboard Utility

To further empower policymakers and the public, the new dashboard features a user-friendly interface enabling users to explore federal spending trends and job impacts statewide and by county, based on the five-year period from 2020 to 2024. This dashboard is designed to help inform budget planning and strategy as Maryland prepares for continuing federal challenges.

Dean Prabhudev Konana of the Smith School remarked, "We are proud to work alongside the Comptroller to deliver data-driven insights that will shape Maryland's fiscal strategies. These economic analyses are crucial for state leaders as we navigate the complexities of federal cuts and bolster our state's economic resilience."

This analysis not only serves as a wake-up call but also as a crystal-clear demonstration of how federal actions resonate through the Maryland economy, demanding coherent strategies to avert further financial fallout. The comprehensive picture painted by the Maryland Comptroller and the University of Maryland grants invaluable foresight to guide decisions that will safeguard the future of communities across the state.