The ongoing federal government shutdown is straining local economies and threatening essential services nationwide. Counties are urging a bipartisan solution to restore stability and protect the federal–state–local partnership that residents depend on.
The National Association of Counties (NACo) this week issued a statement urging a swift, bipartisan resolution to the ongoing federal government shutdown, warning that lapses in operations undermine critical partnerships that counties depend on to serve residents effectively.
NACo Executive Director Matthew Chase said:
Strong, predictable intergovernmental partnerships are key to sustaining programs and services for county residents. The ongoing government shutdown threatens to disrupt the consistent, reliable flow of resources and the important relationships we maintain with federal officials on the ground.
From ensuring our residents’ day-to-day safety, to undertaking infrastructure projects, responding to and recovering from disasters, administering federal programs for vulnerable populations and managing air, road and rail transit, county responsibilities often depend on federal, state and local resources and collaboration.
A lapse in government operations jeopardizes this essential intergovernmental partnership, undermining the stability and well-being of communities.
Counties are calling on the President and Congress to act swiftly and responsibly to fully reopen the federal government and restore the reliability county governments need to serve our residents effectively.
Steady, predictable federal funding remains essential to counties as intergovernmental partners. While county governments generate roughly two-thirds of their own revenue, they also rely on more than $62 billion in federal funding for programs that support communities and safeguard residents.
Maryland Impact: Real Fiscal and Community Risks
In Maryland, the shutdown’s impact reaches far beyond Washington. With nearly 300,000 federal employees and more than 200,000 contractors residing and working in the state, counties face significant fiscal and community risks if the impasse persists.
As previously reported on Conduit Street, MACo has offered a deeper look at the ripple effects of federal government shutdowns.
Lost wages, delayed reimbursements, and stalled projects threaten to strain local economies and county budgets. Federal pay accounts for roughly 12% of all income earned in Maryland, and in Southern Maryland, where federal and defense installations dominate, nearly a quarter of households rely directly on federal paychecks. Including contractors pushes that share to almost half the local economy.
During the 2018–2019 shutdown, Marylanders lost an estimated $778 million in wages, translating to roughly $700,000 in lost state and local tax revenue per day. The exposure today is even greater as all twelve appropriations-funded agencies remain shuttered.
State leaders have already activated tools developed after the last shutdown. The Department of Labor launched its no-interest loan program for “excepted” federal workers, and furloughed employees are eligible for unemployment assistance. Governor Moore’s team has expanded in-person claims support and trained additional staff to handle an influx of shutdown-related requests.
Still, counties bear the brunt of service continuity. As reimbursements stall and uncertainty mounts, counties must fill gaps to maintain stability for residents who depend on consistent public services.
As the shutdown continues, counties are watching local budgets, public services, and economic stability with growing concern. Federal wages anchor household incomes, support local businesses, and help sustain the State’s revenue base. Every missed paycheck or delayed reimbursement compounds the strain on communities that depend on consistent, reliable operations from their federal partners.
Useful Links
NACo: Counties Encourage Federal Government Partners to End Shutdown
Previous Conduit Street Coverage: Shutdown Countdown: State Leaders Outline Risks and Response
Conduit Street Podcast: Revenues, Roads, and Rising Risks
Previous Conduit Street Coverage: Federal Government Shutdown Odds Rise, Maryland Faces Big Risks
