Maryland lawmakers say the state has not yet felt the full impact of recently enacted federal budget cuts, though caution remains about the months ahead. During a briefing of the Joint Federal Action Oversight Committee, Senate President Bill Ferguson noted that delays in implementing the cuts, along with ongoing court challenges, have temporarily softened their effects. The fiscal 2026 budget already accounts for projected revenue declines, with adjustments that included targeted tax increases, fund reallocations, and modest spending reductions.
Some of the largest changes in the federal budget, such as reductions to Medicaid funding and planned federal workforce cuts, are not expected to take effect until after the 2026 election. This delay provides the state more time to prepare, but also adds uncertainty. Federal jobs are a significant part of Maryland’s economy, representing roughly 6% of all employment and one in every ten wage dollars. The Office of the Comptroller reported that in June alone, Maryland lost 8,500 jobs, more than 40% of which were in the federal sector.
Comptroller Brooke Lierman told lawmakers that the 13,000 federal jobs lost since January exceeds the total lost during the federal sequestration period, calling the trend the largest single-month drop in federal government positions in three decades. Her office is currently reviewing over 100 provisions in the federal tax-cut bill to assess their economic impact on Maryland, with findings expected in early September.
State leaders are also watching for indirect effects, such as potential declines in related industries like food services, that could emerge as federal employment and spending contract. The next revenue forecast, due in a month, will offer a clearer picture of Maryland’s near-term fiscal position and guide any adjustments needed to maintain stability amid shifting federal policies.
The Joint Federal Action Oversight Committee was formed in April 2025 by Senate President Bill Ferguson and Speaker of the House Adrienne Jones, who both co-chair the committee. The goal of the committee is to monitor and keep the General Assembly aware of changes in federal policies, funding, and regulations. This oversight enables the General Assembly to respond efficiently and effectively when safeguarding the interests of Maryland and its residents. The Committee is comprised of twenty-six members, with the Senate President and House Speaker each appointing twelve members respectively. An overview and documents from the first meeting can be found here.
State not yet feeling projected effects of federal cuts, lawmakers told – Maryland Matters
