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State officials will get an updated look at Maryland’s revenue picture in a month, but the leader of the Maryland Senate expressed confidence Monday that the state is prepared — at least in the near term — to weather the as-yet-unrealized fallout of ongoing federal budget actions.
Senate President Bill Ferguson (D-Baltimore City) said delays in implementation of recently passed federal budget cuts and employee reductions, and ongoing court challenges to policies implemented by President Donald Trump (R) will have some negative effect on the current budget year.
“We’re expecting to see negative numbers as compared to year over year, but we had built those into our projections,” Ferguson told reporters Monday.
The comments came after a 70-minute briefing for the Joint Federal Action Oversight Committee that Ferguson co-chairs with House Speaker Adrienne Jones (D-Baltimore County). The two appointed the joint committee this spring, after a legislative session where lawmakers crafted a fiscal 2026 budget that closed a projected $3.3 billion deficit by cobbling together shifts of funds from dedicated sources, sales and income tax increases, and some modest budget cuts.
They appointed the committee amid worries about how Trump’s slashing of federal aid, agencies and employment would affect Maryland. At the time, a return by lawmakers to Annapolis to deal with a worsening budget situation, possibly as early as September, was seen as likely.
But the effects of many of the cuts in Republicans’ One, Big Beautiful Bill, including billions in cuts to Medicaid, have been delayed until after the 2026 election. Also delayed, for now, are the expected impacts of federal workforce reductions and cuts to other federal aid and grants.
“Now my expectation is that that does not last forever, and that eventually those court cases and grievance policy protocols will end and those terminations will move forward,” Ferguson said of federal job cuts put in motion by Trump. “But that’s not where we are right now, and so, you know, we have to watch all of this with kind of an eye towards a cautious future.”
Some of that cautious optimism clings to the hope that budget projections made earlier this year will hold for now.
“My expectation is that we will see some level of alignment with our expectation of where we thought we would be,” Ferguson said.
But he and others continue to be concerned about the long-term impact federal budget changes will have on the state’s economy and budget priorities.
Federal jobs make up roughly 6% of all jobs in the state. One of every $10 in wages in the state is tied to $150 billion in annual federal spending, according to a briefing by the Office of the Comptroller.
“Here in Maryland, losses at the federal level are adding up … really threatening our middle class,” Comptroller Brooke Lierman told the joint panel Monday.
In June, the state recorded a loss of 8,500 jobs. More than 40% of those were in the federal government.
Lierman said the decrease represents “the largest single-month drop in federal government positions in Maryland in three decades.” Additionally, she said the 13,000 federal jobs lost since January has surpassed the number of jobs lost during federal sequestration.
“Maryland is really under economic assault from Washington, and the numbers are really staggering, whether it’s the budget reconciliation bill, tariffs or more, there’s so much happening every day,” Lierman said. “But the first step is really to quantify how these various changes will impact Maryland’s economy.”
The comptroller’s office is in the process of examining how more than 100 provisions in Trump’s tax-cut bill will affect the state. That report is expected in early September prior to the updated revenue estimates.
Also unknown, for now, are the ancillary impacts of federal cuts.
“How is that going to affect, you know, the food services industry and indirect economic impacts,” said Deputy Comptroller Ben Siegel. “Obviously we know those are very real as well.”
