Federal Government Shutdown & Maryland’s Economy

As reported in the Washington Post, a federal government shutdown would cost state and local governments millions of dollars a day, further straining already-stretched budgets and threatening an already-weak economic recovery.  There will be a particularly strong effect on Maryland and Virginia, because of the high number of federal jobs in those states.  As reported,

In Maryland, Department of Budget and Management Secretary T. Eloise Foster said in an e-mail that a shutdown “will directly impact the lives of thousands of Maryland families who work for the federal government.”

Every day that the federal government is shut down, Foster said, would cost the state $5 million in lost revenue, including about $1 million in lost sales-tax dollars. Maryland businesses, she said, would lose about $15 million for every day the government’s doors are shuttered.

This summer, Dr. Daraius Irani of the Towson University Regional Economic Studies Institute spoke with county officials and other attendees of the MACo Conference regarding Maryland’s economic ties with the federal government.  In his presentation, Dr. Irani points out that the federal government represents nearly half of the jobs of the top 25 employers in Maryland. For more information, see Dr. Irani’s presentation from the Conference.

To avoid a shutdown, the House and Senate need to agree to fund a continuing resolution prior to October 1.  According to recent coverage in the Post, House Republicans are exploring a plan to avoid the shutdown by shifting health care funding into another bill.

For more information, see these stories in the Post: States fear big losses if government shuts downMaryland could lose $5 million a day in tax revenue from federal shutdown, memo says.