FROSTBURG — A public affairs expert told Frostburg’s mayor and City Council members Tuesday that he fears many Maryland cities will not see substantial economic growth in the years to come as revenue is reduced on a federal level.
Richard J. Reinhardt of Percy Public Affairs, a public affairs and government relations firm in Oxon Hill, said the declining revenue could be a burden to taxpayers.
“The Board of Revenue Estimates — they met a few weeks back — and we ended in the green for the fiscal year at FY25, which ended on June 30,” Reinhardt said.
“We actually have about a half-billion dollars for reserve funds for the fiscal year ending, which is great. What looks ahead is looming and sort of disparaging.”
Fiscal Year 2027 begins July 1, 2026.
“In FY25, we ended with collecting over $264 million above the estimate, which is about a 7% gain. That’s a great surprise but the momentum is not going to last because growth basically slows down to about 5.3% in this current fiscal year,” he said.
“Then it persistently drops down to just 2.2%, estimated, when you look at the estimates coming out from the BRE, and we’re just seeing where things are playing out with the government shutdown.”
He said the numbers are an estimate, but with the government shutdown and a reduced budget, he believes the city should be aware of it in the coming months. Reinhardt said the city’s budget may need to be adjusted without adding more burden onto taxpayers.
“When we get into January, I’d say the two major focal points that we’re going to be dealing with is going to be budget and energy issues, at least for the next two to three years … and then I think the third would be housing,” he said.
He said the current forecast for fiscal year 2026 includes reductions by $35 million.
He said this could be related to the government shutdown and the impact of the Department of Government Efficiency that made large cuts to many federal agencies in the beginning of the year.
“That’s all impact on the state because the state essentially, and I’ll quote the governor … ‘We are a state made up of feds, meds and eds,’” Reinhardt said.
“When we see a lot of those areas being funded, generally speaking by federal dollars, those federal dollars are being taken away.
“That’s a substantial loss of the revenue and income that comes into the state to make a viable continuing function.”