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What does a federal government shutdown mean for Towson, state of Maryland?

Our experts estimate Maryland will lose between $18 million and $68 million in income every day.

Our experts estimate Maryland will lose between $18 million and $68 million in income every day of the shutdown.

Just after midnight early Tuesday morning, the new federal fiscal year began with a partial federal government shutdown. What exactly does this shutdown mean for our university, the state of Maryland and perhaps even our own families? We asked our highly respected in-house economic experts to weigh-in.

According to Daraius Irani, associate vice president of the Division of Innovation and Applied Research and executive director of the Regional Economic Studies Institute, the direct impact on Towson University from the federal government shutdown will be minimal initially, since many federal grants and student loans have already been allocated for the year. However, if the shutdown is extended, it could have more of a direct impact. Additionally, newly funded federal contracts would have a delayed start, which would certainly impact us.

From a larger macro sense, Maryland is particularly sensitive to changes in the federal government, as a disproportionate percentage of the state’s total workforce is employed by the federal government, and because Maryland receives a disproportionate share of federal dollars for research and development. Approximately 90,000 Marylanders work directly for the federal government, along with an additional 180,000 federal government contractors. Both of these groups will be adversely impacted by the shutdown.

Our experts estimate that for each day of a shutdown, Maryland will lose between $18 million and $68 million in income, which translates into $700,000 to $2.5 million in lost income taxes. Additionally, Maryland could lose approximately $1 million in sales tax revenue.

Yesterday, an article appeared in the Chronicle of Higher Education, entitled “How a Government Shutdown Would Affect Academe.” It contains information that is important to all of us who are part of the higher education community.

As new developments occur, we will keep the campus updated on this new turn of events.

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