Unlocking Maryland’s economic potential

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.