The 2024 election has set the stage for sweeping changes to policies and funding streams that shape Maryland’s economy and services. Here, Conduit Street examines how federal policy shifts in critical sectors could reshape Maryland’s future, with counties uniquely positioned to feel the impacts and adapt to evolving demands.
As federal priorities shift, Maryland’s close economic ties to Washington amplify the opportunities and challenges ahead. Decisions on infrastructure investment, disaster relief, environmental protection, and federal employment will impact state-level initiatives and directly shape county budgets, services, and local economies.
Counties play a vital role in connecting federal policies to local communities and must navigate these changes carefully to safeguard residents and sustain essential programs and investments.
Federal Dependency and Risks
Maryland’s economy is inextricably linked to federal funding, employment, and contracts, making it particularly vulnerable to fiscal changes at the national level.
Maryland hosts approximately 160,000 federal civilian jobs, contributing $25 billion annually in wages—11 percent of Maryland’s total wages. Federal contracts generated $42 billion in spending during federal fiscal 2023, fueling private-sector activity and supporting industries ranging from cybersecurity to healthcare.
Counties like Anne Arundel, Montgomery, St. Mary’s, Charles, Prince George’s, and Calvert, which rely heavily on federal employment and contracting, would face heightened economic risks if federal job cuts or contract reductions materialize. The ripple effects of these changes could reduce local revenues, increase unemployment, and strain county resources needed to maintain infrastructure and public services.
Furthermore, ongoing debates in Washington over reducing federal spending and addressing the national deficit could lead to cuts in programs like Medicaid and SNAP, which account for over half of the $19 billion in federal funds in Maryland’s fiscal 2025 budget. Such reductions would pressure Maryland’s most vulnerable populations, increasing demand for local support services and creating challenges for counties.
The FBI Headquarters: A Question of Economic Priorities
The planned relocation of the FBI headquarters to Prince George’s County was expected to bring transformative economic benefits to the County and the surrounding region, including the creation of approximately 7,500 jobs and millions of dollars in local investment.
As previously reported on Conduit Street, MACo joined several Maryland State and county leaders in observing that Maryland’s proposed sites for the new FBI Headquarters are accessible, equitable, and efficient.
However, the recent federal election results could prompt a reconsideration of this decision. The new administration may favor keeping the FBI near the Department of Justice in Washington, DC, or redirect the project to Springfield, Virginia, a competing site.
For Maryland, losing the Greenbelt site would mean missing out on substantial federal investment and economic growth. Prince George’s County, in particular, would face the challenge of redirecting resources and finding alternative projects to spur local development. Meanwhile, counties statewide would lose potential secondary benefits from increased jobs, housing demand, and regional commerce associated with such a significant federal presence.
Infrastructure Investments: Balancing Opportunity and Uncertainty
Maryland’s infrastructure stands at a critical juncture, with significant projects like Baltimore City’s revived Red Line transit initiative and statewide broadband expansion depending heavily on federal funding.
The Francis Scott Key Bridge collapse highlighted the critical need for reliable disaster relief funding and federal support for infrastructure recovery. Since its failure, the bridge, a vital transportation link for residents and commerce in the Baltimore region, has created significant logistical and economic challenges.
The Biden administration requested a supplemental appropriation to fully fund the reconstruction of the Francis Scott Key Bridge at a 100 percent federal cost share.
However, disaster relief funding remains stretched thin, and ongoing congressional debates over spending priorities leave approval uncertain. Delayed funding hinders recovery efforts and diverts resources from other critical projects across the state.
Disaster Relief and Resilience: The Cost of Cuts
As previously reported on Conduit Street, proposals to overhaul federal disaster funding could leave Maryland and its counties shouldering more of the costs for recovery and rebuilding.
FEMA’s current cost-sharing model covers up to 75 percent of disaster-related expenses. Still, proposed changes could reduce this to 25 percent for “smaller” disasters, placing a more significant financial burden on state and local governments.
Raising the per-capita threshold for disaster declarations could also make it harder for Maryland to access federal aid, particularly in rural and less populated areas. Without this support, counties could face significant delays in rebuilding infrastructure, homes, and businesses after disasters.
Cutting FEMA preparedness grants would erode Maryland counties’ capacity to improve infrastructure, train first responders, and reduce disaster risks. The Maryland State Disaster Recovery Fund, which MACo advocated for, fills some gaps but remains underfunded, exposing counties to future crises.
Chesapeake Bay and Environmental Stewardship
The Chesapeake Bay is central to Maryland’s economy, environment, and identity. Federal funding and regulations under the Chesapeake Bay Program have driven progress in reducing pollution and restoring critical ecosystems.
However, potential rollbacks or funding cuts could undermine these efforts, hindering Maryland’s progress on cleanup goals and increasing costs for local governments tasked with implementing stormwater and nutrient management programs.
As essential partners in watershed restoration, counties would bear the brunt of funding shortfalls. Federal investment in green infrastructure and climate resilience is critical to helping counties adapt to rising sea levels, flooding, and other environmental challenges that disproportionately affect coastal and low-lying areas.
Conclusion
The 2024 federal election results bring both challenges and opportunities for Maryland. Decisions on infrastructure funding, disaster relief, and federal employment will shape the state’s economy and services for years. Maryland’s reliance on federal dollars underscores the need for proactive advocacy and collaboration to protect local priorities.
Counties drive the implementation of state and federal policies and must actively collaborate with state and federal partners to ensure local priorities stay at the forefront. Building resilience, forging strong partnerships, and taking a proactive approach will position Maryland’s counties to tackle uncertainties head-on and thrive in an evolving policy landscape.
Stay tuned to Conduit Street for ongoing analysis of federal decisions and their impact on Maryland.
This article is part of MACo’s weekly Policy Deep Dive series, in which expert policy analysts explore and explain the day’s top county policy issues. Read all of MACo’s Policy Deep Dives.
