Prince George’s County’s budget has survived federal job cuts. Is the worst yet to come?

Like other D.C. suburbs, Prince George’s County has been bracing for the financial impact of massive federal job cuts under President Donald Trump’s administration.

But, unlike its neighboring counties, those fears in Prince George’s were compounded by unrelated exits of economic engines such as Six Flags America and the Washington Commanders.

When County Executive Aisha Braveboy took office in June 2025, the county was facing a $155 million structural deficit. Over the ensuing months, officials whittled the deficit with hiring freezes, agency “streamlining” and revenue adjustments. As of January, just months before budget season, the gap stood at $58 million.

By March, when Braveboy presented the budget to the County Council, it had vanished.

“Prince George’s County is delivering to the council, as well as our community, a proposed budget where there is zero structural deficit, and that is a huge achievement in eight short months,” Aisha Braveboy told the council March 12.

But a closer reading of the 860-page budget document, along with interviews with economists, suggests the county’s toughest fiscal challenges lie ahead.

Three economists interviewed by The Banner said the full force of federal job cuts has not yet arrived.

“Prince George’s County is doing just fine through the second inning of the game,” said Anirban Basu, economist and founder of the Sage Policy Group. “But I can tell you that the third, fourth, fifth, sixth and so on innings are going to be much more challenging.”

Taxable income — the second-largest revenue stream in the county — has exceeded expectations in Prince George’s County in the months following a massive restructuring of the federal workforce that makes up a significant portion of the county’s economy. But experts worry that could soon change.

Given the lag between when jobs are cut and when those cuts show up in tax revenue, they said, the real pain is more likely to be felt in next year’s budget cycle.

There are other fiscal challenges, too, including unfunded retiree health care obligations and a stormwater fund that is hemorrhaging money.

Despite the economic headwinds, funding for the county executive’s office is increasing by $3.84 million and the County Council’s office is seeing a $4.4 million increase.

Separate from the budget, the county council last month passed pay raises for themselves and the executive’s office.

The raises were recommended by an independent committee but still represent spending increases, while other areas of the county government, notably the council’s audits and investigations division, are facing cuts,

Thomas Johnson, communications director for the county executive’s office, said in a statement that his office’s increased budget reflects funding levels that were in place for the current fiscal year following a midyear budget amendment by the County Council.

As for the cuts to the council’s audits and investigations division, Johnson said the council’s overall budget is increasing and pointed to other areas of county government that perform independent audits.

“We are not aware of any plans to reduce or eliminate the necessary functions of audits and investigations,” he said.

Closing the budget gap

During her presentation to the County Council, Braveboy paused on a slide highlighting an array of dire headlines about the county’s economic picture.

“County faces major fiscal hole,” read a headline about the $170 million budget gap from the last fiscal year. “A 50-year regional attraction shuts down,” described the closure of Six Flags America. Other headlines described the exit of the Commanders, the loss of a proposed new FBI headquarters and the potential impact of federal job losses.

“That’s what I walked into as county executive,” Braveboy said dryly. “Lots of fun, right?”

Braveboy largely framed the erasure of the budget’s deficit as the result of good fiscal housekeeping, though the slides hinted at what was really behind closing that gap — income tax revenue adjustments.

In the first months of President Donald Trump’s second term, the newly established Department of Government Efficiency ushered in a massive restructuring of the federal workforce and contracting that threatened the heart of the county’s economy. The department was launched as an effort to “maximize governmental efficiency and productivity.”

There are about 65,000 federal workers in Prince George’s County, making up roughly 17% of its overall workforce, according to data compiled by the Metropolitan Washington Council of Governments. Given that federal workers earn a higher median salary — about $110,000 annually, compared to the county’s overall median salary of roughly $66,000 — they make up an even larger portion of the county’s taxable income.

Prince George’s County loses about $3.2 million in income tax revenue for every 1,000 federal jobs cut, according to estimates by the county’s fiscal watchdog. A consultant estimated that county residents had lost nearly 6,000 federal jobs by the end of March 2025, according to an October 2025 letter from the Spending Affordability Committee.

The county’s exposure to federal government shrinkage runs far deeper than federal workers, with an ecosystem of contractors, consultants and small businesses whose livelihoods depend on agency budgets.

But, in the fiscal year 2026, income tax revenues came in surprisingly high, at just over $1 billion, about $150 million more than the county’s budget office had anticipated.

For the upcoming fiscal year 2027, the county is budgeting for slightly less than that, at $950 million.

The better-than-expected tax picture is doing a lot of heavy lifting for what the county’s own budget describes as an underlying “structural imbalance arising from the mismatch between limited revenue growth and significant service delivery cost increases.”

Johnson, the county executive’s spokesperson, said the reduction was due to job cuts that have started to appear in third-quarter employment data for 2025, which showed nearly 1,600 jobs lost.

Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University, said the impact of federal job losses shows up on a lag because many workers took severance packages, temporarily boosting income.

Economists interviewed by The Banner agreed it could be about six fiscal quarters before federal job losses show up in tax revenue.

“Realistically, the numbers really show up hard in the estimated forecast for FY28, FY29,” Irani said.

Causes for concern

The proposed budget reveals other causes for concern, detailing fiscal challenges that have been brewing for years.

In January, when the county was still facing a more than $58 million deficit, its Spending Affordability Committee warned officials against drawing on its reserves amid an uncertain economic climate due to federal restructuring, recommending spending cuts instead.

The warning carries particular weight, given that the Moody’s credit rating agency last year downgraded the county’s bond rating from AAA to AA1. It cited in part, that the county doesn’t have enough cash on hand to meet its spending obligations in the case of a fiscal emergency, such as a reshaping of the federal workforce, and would potentially have to borrow money.

One specific area of the budget flashing warning signs is the stormwater management fund, which maintains pipes, drainage systems and related infrastructure.

That fund is projected to end the year nearly $94 million in the red, and the county is drawing down $40 million in reserves just to keep it operational. The ad valorem tax rate supporting the fund was last changed in 2002, according to the county executive’s office.

Johnson said “all options continue to be discussed” regarding the fund’s revenues and expenditures.

“At the time of this writing, the county continues to evaluate options to address the fund’s long-term structural deficit,” he said.

The county is also funding retiree health care costs on a “pay-as-you-go” basis, which means there is no dedicated trust fund to support some $1.6 billion in liabilities. The county is paying $44 million for those costs in the upcoming budget.

Johnson said the county executive is aware of the issue and has allocated $10 million toward the liability.

“Additional actions are under consideration for future budgets,” he said.

A region in flux

On the heels of presenting her first budget, Braveboy championed a move by state lawmakers to create tax incentives designed to support the construction of a Sphere Entertainment venue — seen as a crucial economic win for the county amid the uncertainty in the federal government.

The Washington region lost more than 56,000 jobs in 2025, according to the latest federal data compiled by the Brookings Institution, about 96% of which came directly from federal layoffs.

That’s sent unemployment rates rising in the D.C. suburbs, including Prince George’s, disproportionately affecting women and people of color, Brookings found in its March 2026 analysis.

Basu, the Sage Policy Group economist, said, once someone loses their job, the probability that they will leave the region “goes up substantially.”

“The question, therefore, for the calendar year 2026 is: How many of these displaced federal workers who have been living in Prince George’s County are now pursuing an address outside of the county, and perhaps outside of Maryland?” he said.

The state’s economy is also facing a squeeze, Basu said, and he predicted taxes and fees would likely be raised — something lawmakers were seeking to avoid this year, given the upcoming election.

“It may also mean that state government support for local governments will be less profound than it has been,” he added.

The county still has two major federal installations, both of which may be under threat: the NASA Goddard Space Flight Center in Greenbelt and the Beltsville Agricultural Research Center.

Lucy Dadayan, a researcher at the Urban Institute who has been following the impact of federal layoffs, says it is hard to predict when a county such as Prince George’s might recover from the job losses, even if the next presidential administration stabilizes or begins to rebuild the federal workforce in suburban Maryland.

“Unfortunately, when something like this happens, it creates mistrust,” she said. “It’s a question whether folks would be willing to go back to their employer.”