Baltimore Sun

Unlocking Maryland’s economic potential

- By Mary D. Kane

The Maryland Chamber of Commerce recently published The 2023 Competitiv­eness Redbook for Maryland, a data-driven snapshot that compares Maryland’s economic health with the rest of the country across various economic indicators, such as population change, employment growth, taxation and economic, fiscal and regulatory freedom.

The data we’ve uncovered shows that, while there are areas of strength, Maryland and its businesses are grappling with high costs of living and high business costs, high taxation rates, a challengin­g business environmen­t, and restrictiv­e economic, fiscal and regulatory policies. These factors make it challengin­g to attract and retain businesses, support growth and provide Marylander­s with ample job opportunit­ies.

Maryland consistent­ly ranks as one of the least economical­ly competitiv­e states nationally and regionally when it comes to taxation on individual­s, businesses and property. Additional­ly, the state ranks poorly in business friendline­ss, economy, cost of doing business, cost of living, and economic, fiscal and regulatory freedom. Moreover, the data indicates that Maryland’s population is declining, and workforce growth over the past year and 10 years has been moderate at best.

Here are some statistics to consider: CNBC’s Top States for Business, released in July 2022, ranks Maryland poorly for business friendline­ss (29th), economy (32nd), cost of doing business (44th) and cost of living (44th).

The Mercatus Center at George Mason University in 2021 ranked Maryland’s economic, fiscal policy and regulatory freedom as 44th, 24th and 47th, respective­ly, among all states.

U.S. Census Bureau data for July 1, 2020, through July 1, 2021, reveals that Maryland is the 19th most populous state, but that the state is 40th for population growth, with a population loss of 0.12%. Additional­ly, Maryland’s estimated net domestic migration is negative, ranking the state 44th in this area.

The U.S. Bureau of Labor Statistics reports that Maryland gained 68,800 nonagricul­tural jobs from August 2021 to August 2022, ranking 22nd in the number of jobs gained and 34th in percentage gained. When looking at job growth over the past 10 years (August 2012-August 2022), nonagricul­tural employment growth in Maryland ranked 28th in the nation, with only 155,000 jobs added during this period.

The Tax Foundation Facts & Figures for 2023 shows that Maryland has the second-highest number of state and local individual income tax collection­s per capita. The only areas ranking higher in this metric were Washington, D.C., and New York.

Furthermor­e, Maryland ranks 46th in overall business tax climate, scoring in the lower half in all metrics, including corporate tax (33rd), individual income tax (45th), sales tax (30th), unemployme­nt insurance tax (41st), and property tax (42nd). (Tax Foundation Facts & Figures, 2023)

These metrics are concerning for Maryland residents, communitie­s, and businesses.

While everyone wants to see Maryland become more competitiv­e, help individual­s and families build wealth, and assist businesses in succeeding, the policies, regulation­s and costs of doing business and living in Maryland are creating an adverse economic situation that needs to be addressed before it’s too late. While regulation­s and taxes are necessary, we must strike a balance between necessary regulation­s, taxes and policies that will help create a more business-friendly environmen­t.

States across the country have realized, after hard lessons learned, that raising taxes and implementi­ng burdensome regulation­s on businesses is not a viable strategy for growing thriving communitie­s. Businesses are the drivers of our economy and help communitie­s grow and prosper. When businesses leave, they take jobs, economic investment­s, community support and tax revenue with them.

We all agree that building a prosperous, resilient state where people, communitie­s and businesses can thrive is critical to making Maryland a great place to live, to raise a family and to own a business. Building a prosperous and competitiv­e economy in Maryland will require collaborat­ion and a shared commitment from policymake­rs, businesses, and residents.

By working together to create a more favorable environmen­t for business and encourage business investment, innovation and growth, we can help Maryland unlock its full economic potential and create a better future for all who call the state home.

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