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Maryland could soon miss tax payments due to federal government shutdown

As a partial shutdown of the federal government continues, the state of Maryland could soon be missing out on tax collections.

Democratic Comptroller Peter Franchot’s office estimated Monday that 172,000 Marylanders are affected by the shutdown, including federal employees and contractors who aren’t being paid.

Those workers typically receive a combined $778 million in salary every two weeks, and pay a total of $57.5 million in state and local income taxes for each of those pay periods, according to the comptroller’s office.

About 90,000 federal workers living in Maryland are furloughed or working without pay, meaning they are not being paid a combined $408 million every two weeks.

And the comptroller’s office estimates about 82,000 federal contractors are losing $369 million in pay every two weeks.

With workers currently not receiving paychecks, the state can’t collect those taxes.

Some federal agencies make such tax payments to the state every few months or every month, but some send the money every two weeks, according to the comptroller’s office. That means that if the shutdown continues, the state will have less cash coming in.

Federal workers are expected to receive back pay once the shutdown ends, and the state will likely get its tax payments at that time.

But federal contractors aren’t guaranteed to get back pay, so the state could be out that money.

“These estimates demonstrate what we already knew — the unnecessary shutdown of our federal government is having a devastating effect on Maryland’s families and our state’s economic well-being,” Franchot said in a statement.

About a quarter of federal government agencies have been closed for weeks as fallout of an impasse between Congress and President Donald Trump over funding for a wall along the U.S. border with Mexico.

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