ANNAPOLIS, Md. – Maryland Governor Wes Moore addressed state lawmakers on Wednesday, emphasizing the need for the state to reduce its dependency on federal jobs and cultivate other economic strengths amidst budget challenges and uncertainties from the federal government.
In his speech, Moore highlighted Maryland’s $3 billion budget deficit and likened the current economic landscape to “two storms” that have collided. He stated, “We are facing an unprecedented fiscal challenge — the likes we haven’t seen since the Great Recession. Compounding this, we are grappling with a new administration that introduces uncertainty and chaos.”
The recent actions of the federal government, including a hiring freeze and a proposal for a widespread federal workforce buyout, have caused significant disruptions in heavily Democratic Maryland. Moore noted that these federal changes have far-reaching implications for the state’s economy, particularly as federal employees make up about 5.7% of Maryland’s workforce compared to 1.9% nationwide.
“These ideological shifts will adversely affect our middle class, who are already feeling the impacts of inflation,” Moore remarked. He lamented the shift in the long-standing relationship between Maryland and federal authorities, a partnership historically supported by leaders across the political spectrum.
Despite the challenges, Moore expressed his willingness to collaborate with the new administration and Republican-led Congress to strengthen the partnership between Maryland and Washington, D.C. “However, if the recent policy decisions are indicative of what’s to come, we may be facing harsh realities rather than the clarity our nation urgently requires,” he cautioned.
Moore pointed out that Maryland, Virginia, and the District of Columbia host approximately 20% of the nation’s federal workforce, emphasizing the economic ripple effects tied to federal employment and contracts. In 2022, federal procurement accounted for a whopping $42 billion investment in Maryland, representing a significant portion of the state’s GDP.
To address the economic challenges ahead, Moore identified three emerging industries for Maryland: life sciences, information technology, and aerospace and defense. He stressed the importance of closing the budget gap in a manner that fosters middle-class growth and diversifies the state’s economy away from federal reliance.
Maryland Republicans have countered the governor’s narrative, arguing that the state’s struggles stem from policies enacted by a Democratic supermajority rather than the actions of the new federal leadership. State Senator Steve Hershey remarked, “Maryland families are facing financial hardships due to high costs and overregulation, not because of the new administration in Washington.”
In response to the budget deficit, Moore has proposed new income tax rates for high earners. This includes a new 6.25% tax rate on incomes exceeding $500,000, with a 6.5% rate for those earning over $1 million, along with a proposed reduction in the corporate tax rate. The governor claims that 82% of Marylanders will either experience a tax cut or maintain their current tax levels.
