Four steps to unlock potential of Md. economy
Maryland’s economy is lazy, according to Gov. Wes Moore.
Our economy is indeed stagnant. Maryland grew by a measly 0.2% between 2018 and 2022, compared with a 7.5% economic growth rate nationally.
But Marylanders are not afraid to work, and we are not lazy.
Instead, our economy is held back by state and local government policies that stifle broad-based economic growth in favor of narrow special interests. Simply stated: Maryland’s talented, educated population lives and works in a highly regulated, noncompetitive business environment beset by dangerous levels of crime.
Maryland has talent. We are the second most-educated state in the nation. We rank 11th on the human development index, which measures life expectancy, per capita income and education. Given the strength of our human capital, Maryland’s poor economic performance is troubling.
If the governor is serious, he and our state legislators must face some hard truths. Maryland’s economic and regulatory freedom ranked 44th and 47th, respectively, among all states in 2021. We have the seventh-highest tax burden. We are close to the bottom of the nation on myriad other indicators: 48th in one-year annualized housing appreciation, 47th for cost of doing business, 45th in attracting college students, 46th in overall business environment, 48th in road maintenance spending, and 49th in percentage growth of GDP.
Crime in Maryland also stunts our economic future. Maryland scores in the bottom third for public safety, according to USA.com, and Baltimore City has been ranked the third most dangerous big city in America. Economic growth requires security, predictability and safety.
No wonder more people are moving out of Maryland than moving in.
Yet, economic opportunity is possible. It will require discipline — an elusive trait for most politicians. Here are four steps to unlock Maryland’s economic potential.
First, intentionally and substantively improve the state’s business-enabling ranking.
Annapolis must adopt national best practices to lower the comparative transactional costs for entrepreneurs, reduce permitting and licensing times for small businesses, rationalize and reduce regulations, incentivize investment seed funding, and then incubate and accelerate startups. Given our human capital, Maryland should be at the top of the business environment rather than at the bottom. Moore can achieve measurable results and jump-start the economy simply by changing Maryland’s dismal ranking as a place to do business.
Second, we should double down on Maryland’s comparative strengths as being foundational to a national and global economy.
Maryland has a deep science, technology, engineering and math culture. We have globally recognized business and thought leaders in medicine, biotechnology, climate change innovation, defense and intelligence. We have easy access to the highest-end markets in the world. Our grandparents manufactured and built leading technology. There is no reason we cannot claim the mantle of global innovators again.
Third, recognize that human capital is fluid — people move.
We must be the home to the next generation of entrepreneurs. We must expand the technology offerings of our community college system. Maryland should aim to have five of its community colleges in the nation’s top
100 community colleges. Talent also needs housing. State and local governments should relax zoning within Maryland’s small towns so infill housing can serve to revitalize these towns. Baltimore, by last count, has 14,000 vacant homes — it’s time to connect affordable housing to the massive supply of existing, albeit empty, housing in Baltimore. To do so, we must reduce endemic crime in Baltimore while building safe and secure communities. Stabilizing crime and incentivizing homeownership would give the city and state the economic push it desperately needs.
Finally, economic growth must expand well beyond the Baltimore-Washington corridor. Our rural communities have been left behind. To unleash the rural Eastern Shore and Western counties’ economies, lawmakers must understand that nitpicky government rules remain a potent and underappreciated source of populist anger and a clear economic drag on rural communities. Annapolis must support Maryland’s rural economy, including facilitating more farm- or bay-to-table offerings, relaxation on home kitchen products, an opening of food options at wineries and farm breweries, and decentralized renewable energy production.
All 50 states in the union are vying for economic opportunity. Maryland has the talent but not the ecosystem to compete. Economic decline can be brutal and irreversible for generations — witness Baltimore. If Wes Moore is serious, it will take more than just words to build a resilient, competitive economy in Maryland.