BALTIMORE — Maryland's economic outlook is appearing more challenging by the day.
On Friday the U.S. Department of Education notified Maryland's Department of Education it was rescinding hundreds-of-millions in COVID-19 recovery funds.
State Superintendent Carey Wright says the move would leave Maryland school districts in a $360.7 million hole.
"We are extremely concerned about the catastrophic budget implications in terms of staffing, programs and services to students in classrooms across Maryland," said Wright. “The U.S. Department of Education previously extended the time for states to use pandemic recovery funds to pay for services through January 2026. These funds were spent or committed with every expectation of reimbursement."
The Trump White House recently began the process of dismantling the U.S. Department of Education, which could result in half of its staff being let go.
Higher Education has also been impacted by cuts.
Maryland Attorney General Anthony Brown is currently in the middle of a lawsuit that's reached the Supreme Court over a decrease in health research funding.
For example, the University of Maryland at Baltimore (UMB) says it stands to lose $49.5 million per year. That's not counting other contracts terminated over Diversity, Equity and Inclusion.
Johns Hopkins is facing massive budget cuts as well.
"Last year, for instance, nearly 50% of our total incoming funds was derived from research conducted on behalf of the federal government," Johns Hopkins University President Ron Daniels recently wrote in a letter to students and staff.
Earlier this month, Hopkins announced plans to cut over 200 Maryland based jobs, as part of a broader plan eliminating more than 2,000 jobs across 44 countries that were primarily funded by USAID.
"The unexpected stoppage of foreign aid funds has resulted in the suspension and now termination of most of our USAID grant portfolio at Jhpiego, the Bloomberg School of Public Health’s Center for Communication Programs, and the School of Medicine, which totals more than $800 million," Daniels wrote in a follow-up letter.
Hopkins is hardly the only entity affected by USAID cuts.
Global Refuge, a Baltimore based company that places foreign nationals admitted into the country via the Refugee Admissions Program, was just stripped of their funding too because Trump froze future admissions. Last year, the organization collected hundreds of millions in federal funding in the final months of the Biden Presidency.
U.S. Secretary of State Marco Rubio has sinceterminated 90 percent of USAID contracts, with the help of Elon Musk and his Department of Government Efficiency (DOGE). As result, many of the agency's workers were relieved of their duties.
The Baltimore National Heritage Area appears to be another casualty from the cuts, as they just reported a 53 percent loss.
Since the pandemic, Maryland has become more and more dependent on federal funds to supplement the state economy.
While former Governor Larry Hogan left office with a surplus, his successor, Governor Wes Moore now faces a $3 billion budget deficit.
Moore blames the dire situation on federal COVID cutbacks, but a good portion could also be attributed to the state's costly education Blue Print.
The State Legislature is currently exploring various ways of making up the difference including potential tax increases.
Last year the federal government gave Maryland a 17-year high of $114.6 billion in contracts, grants and other direct payments.
The Social Security Administration and Department of Health and Human Services each provided the state over $25 billion.
According to USA spending, 2025 federal funding obligations for Maryland is drastically down at $42.6 billion.
The Trump administration has vowed to continue slashing funding to states through a variety of means.
Some cuts are already underway via employee firings and layoffs.
Brown says the firings led to 813 unemployment claims being filed in the state between January 21 and March 3.
He and 20 other state attorneys general later sued the administration over the mass firings and layoffs.
So far two federal judges, including one in Maryland, have ordered the employees to be reinstated, however the case is long from over and is now before the U.S. Supreme Court.
On March 28 the U.S. Department of Labor issued its preliminary jobs report for February which showed Maryland gaining 3,400 jobs despite a loss of 700 federal jobs.
"Due to the timing of when the employment data is collected, these reported losses do not include the federal layoffs that began in mid-February, impacting probationary and other workers, or subsequent federal contract terminations and grant cancellations," the Maryland Department of Labor said in a press release. "Recent federal actions and uncertainty threaten to weaken the recent gains in Maryland’s economy."
Maryland is home to the fourth highest number of federal employees in the nation, behind California, Texas and Virginia.