Decades of federal dependency are colliding with a long-overdue reckoning.
By Michael Phillips | MDBayNews | An accountability analysis and economic report
The federal government shed roughly 18,000 jobs in March — the 14th consecutive monthly decline. The total workforce has fallen to its lowest level since 1966, with more than 350,000 positions eliminated since the start of 2025.
For most states, that’s a data point about the size of government.
For Maryland, it’s a stress test — one the state has been quietly failing to prepare for.
The Dependency Maryland Built
Maryland didn’t stumble into its reliance on federal employment. It cultivated it, over decades, as a deliberate economic strategy.
Federal employment represents 6% of all jobs in the state and 10% of all wages — more than $26.9 billion in annual earnings. The federal government directs more than $150 billion annually into Maryland through wages, retirement income, contracts, grants, and direct payments. Maryland ranks 18th in population but third in federal civilian jobs nationally.
That arrangement produced real benefits: low unemployment, high median household income, housing stability, and a middle class that stretches from the DC suburbs to Southern Maryland. It also produced something else — a state economy structurally dependent on decisions made in Washington, by politicians Maryland didn’t elect, managing budgets Maryland doesn’t control.
Republicans in Annapolis have made this argument for years. When federal cuts arrived in 2025, some said bluntly: this is what overdependence looks like.
They aren’t entirely wrong.
25,000 Jobs and Counting
Maryland lost nearly 25,000 federal jobs in 2025 — more than any other state in the nation. The pain is real and the disruption is genuine, particularly for middle-class workers who built careers around the assumption of government stability.
But the more honest accounting requires acknowledging that the federal workforce had grown substantially in the years prior. Federal employment in Maryland increased 11.5% between 2018 and 2024 — faster than Virginia or Washington, D.C. The state added federal dependency faster than it added private sector resilience.
What’s happening now is painful. It is also, in part, a correction to a model that was never sustainable on its own terms.
The Map Looks Different Than You Think
The conventional story focuses on Montgomery and Prince George’s counties. That framing misses where the real exposure runs deepest.
St. Mary’s County has roughly 89 federal workers per 1,000 residents — nearly 10% of its entire workforce, anchored by Naval Air Station Patuxent River. NAVAIR has already cut its civilian workforce by 9.3% and is operating under a DOD hiring freeze. “It’s no doubt that St. Mary’s is a company town,” Del. Matthew Morgan (R-St. Mary’s) said earlier this year. “The economy on this is entirely based on that.”
Harford County, home to Aberdeen Proving Ground, has roughly 43 federal workers per 1,000 residents — near-equal to Montgomery County on a per-capita basis, with 60% of Aberdeen’s workforce living locally.
Charles County may be the most quietly exposed. According to the Maryland Comptroller, 29% of Charles County’s adjusted gross income comes from federal wages and retirement — the highest share of any county in the state. About one in five Black workers in the Charles and Prince George’s corridor is employed by the federal government, double the statewide average. Charles County recently became the wealthiest majority-minority county in the nation — a distinction built almost entirely on federal income that is now contracting.
Anne Arundel hosts Fort Meade, the NSA, and U.S. Cyber Command. Its true federal exposure is almost certainly understated: intelligence agency employment is classified and excluded from every official dataset. Whatever the numbers show for Anne Arundel, the real figure is higher.
Montgomery County anchors NIH, FDA, and NIST. Prince George’s hosts the Census Bureau, NASA Goddard, and the SSA. Baltimore City and County hold the Social Security Administration’s national headquarters and CMS. Fort Detrick in Frederick, with five cabinet-level agencies and more than 10,800 on-campus jobs, makes that county a significant node as well.
Every region of Maryland has exposure. None of them have adequate contingency plans.
The Contractor Problem Nobody Is Counting
The 25,000 job losses in official data represent only direct federal employees. They do not count contractors.
Maryland has an estimated 210,000 federal contractors — a shadow workforce whose livelihoods depend entirely on federal spending but who appear nowhere in employment statistics. Federal contract spending in Maryland totaled nearly $49 billion in 2024 — roughly 10% of the state’s entire GDP. When agencies cut budgets, contracts follow. Those workers lose income with no notice, no severance, and often no unemployment eligibility. Their losses won’t show up cleanly in any monthly jobs report.
The true scale of Maryland’s federal exposure is almost certainly larger than any published number reflects.
The Fiscal Cascade
In Southern Maryland, unemployment insurance claims tell the early story. In Charles County, weekly claims rose from 52 at Trump’s inauguration to 164 by late April 2025. In Calvert County, from 26 to 70. In St. Mary’s, from 13 to 36. Maryland’s unemployment rate climbed from 3.8% to 4.2% between September and November as deferred resignations hit.
Private sector employment fell by an estimated 4,400 jobs in October and November combined — not from direct layoffs, but from businesses pulling back on hiring before the full impact even registered. That’s how dependency works: the private sector contracts in anticipation of the federal contraction, before a single additional job is formally cut.
State revenues are feeling it too. Governor Moore, facing downstream fiscal pressure his administration helped create by never seriously diversifying the state’s revenue base, announced a hiring freeze for the Executive Branch in the FY26 budget. Moore has said Maryland must move away from “the eds, the feds, and the meds.” He has been saying some version of this for two years while presiding over a state budget that remains heavily tied to federal flows.
That’s not just a talking point problem. It’s a governance problem.
The Harder Question
The disruption from federal workforce cuts is real. Workers who built careers in public service are facing genuine hardship, and communities built around military installations have limited options for rapid pivots.
But the harder question — one Maryland’s political leadership has avoided — is why a state with Maryland’s assets, education levels, and geographic position never built a more resilient private sector foundation. The answer involves choices: choices to keep taxes high on business, choices to prioritize government employment over private sector growth, choices to treat federal dependency as a feature rather than a risk.
Those choices produced the quality of life Maryland residents have enjoyed for decades. They also produced the vulnerability now on display.
The federal workforce has never been this small in the modern era. For Maryland, the signal isn’t just about Washington’s contraction. It’s about what Maryland chose to build — and what it failed to.
Sources: Maryland Department of Labor; U.S. Bureau of Labor Statistics; Maryland Office of the Comptroller / UMD Smith School of Business, June 2025; Maryland Matters; Federal Reserve Bank of Richmond; Maryland Governor’s Office.
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