Friday Five
Dec. 20, 2024 | This week's latest on Maryland business and government
1 — Governor Moore signs executive order to bolster Maryland’s economic competitiveness
Governor Wes Moore yesterday signed an executive order to strengthen Maryland’s business climate and catalyze more economic growth in the state. The executive order includes the establishment of the Governor’s Office of Business Advancement; establishment of the Maryland Coordinated Permitting Review Council; establishment of a Certified Sites Program; establishment of a Governor’s Economic Competititiveness Subcabinet; establishment of a government loaned executive program at the Department of Commerce; Directs an all-of-government approach to supporting priority industries and sectors; directs a comprehensive review of Business Tax Credit, Financial Assistance and Incentive Programs; directs the evaluation and review of Certain Business Licensing Programs; among others.
Our take: “This is an important step forward for Maryland’s businesses, communities and workforce,” said Mary Kane, President & CEO of the Maryland Chamber of Commerce. “Economic growth is the only sustainable way to address Maryland’s budget challenges while ensuring that our businesses, residents and communities can thrive. We’re encouraged by the Governor’s commitment to fostering an environment where businesses can succeed, and all Marylanders have access to work, wages and wealth.”
2 — Solutions to Maryland’s $3B budget crisis likely waiting game
Much of the legislating the Maryland General Assembly does in 2025 will likely be influenced by the state’s growing budget deficit as well as policies set by President-elect Donald Trump’s next administration, according to state leaders. The crux of session priorities for 2025 will center around balancing the state budget for fiscal year 2026 while minding the projected nearly $3 billion deficit — the largest in recent history. While Senate President Bill Ferguson recognized the impact that cuts to the federal government could have on the state’s bottom line, he said it is unlikely that elected officials will know what the exact impact of the incoming Trump administration will be until his first 60 days in office.
What's next: A major concern among feared by some is the potential for tax hikes to address the growing deficit. Governor Moore has publicly said that he has a high bar for raising taxes, preferring instead to cut from existing programs and use temporary revenue measures. The 2025 session begins Jan. 8, with the govenror's budget proposal due to the legislature by Jan.15.
3 — Maryland struggles with budget deficit, neighbors thrive
Maryland is staring down a significant budget shortfall while several of its neighboring states are enjoying surpluses. Delaware concluded its fiscal year on June 30 with a surplus of $546.2 million, according to the state’s budget office. Meanwhile, West Virginia's budget agency reported a fiscal year surplus of $826.6 million despite a declining population. Virginia’s budget office reported an anticipated surplus of over $2 billion in August. U.S. Census Bureau data shows Virginia is the top relocation choice for Marylanders leaving the state.
From an expert: Dr. Daraius Irani, chief economist with the Regional Economic Studies Institute at Towson University, believes some of the state’s financial troubles can be attributed to a lack of business-friendly forethought. "It is sometimes challenging to start a business in Maryland,” Dr. Irani said. “There are a lot of regulations we have put in place that make it somehow of a less-than-streamlined process. Maryland can start a lot of businesses, the challenge really is retaining those businesses."
4 — Wanna slash the federal bureaucracy? You might take Maryland’s economy with it, too
While some states have diverse economies built on a variety of different industries, others, including Maryland, can pinpoint a single industry or employer as a crucial financial driver. About 10% of the state’s workers, or an estimated 327,000 Marylanders, are directly employed by the federal government, according to the U.S. Census. These workers have relatively big paychecks from dozens of different agencies and military installations. They contribute substantially to the budgets of local and state governments via taxes.
Wake-up call: Regardless of how the Trump administration approaches the federal budget, economist Anirban Basu said this moment should be a wake-up call for Maryland. "Maryland would not be in a tight spot if its private sector workforce had been growing alongside its federal workforce, but it has not," Basu said.
5 — State panel votes to study, rather than recommend, ways to pay for climate plan
One year after a state environmental agency calculated that it would cost Maryland at least $10 billion to meet the government’s ambitious climate mandates, the Maryland Commission on Climate Change took small steps Thursday toward considering how to pay for them. Following intense negotiations Wednesday between officials from Governor Moore’s administration and environmental leaders, the climate commission adopted amendments to original recommendations for generating revenues that instead call for studies on how those proposals could be implemented.
Revenue recommendations: Commission members have been weighing three recommendations from an internal workgroup to generate revenues for the state’s climate plan. One would have created a cap-and-invest program to make the transportation and building sectors pay for carbon emissions; another would have established a fossil fuel transportation fee and mitigation fund; the third would have assessed fines on 40 large fossil fuel companies to compensate the state for historic climate emissions and associated environmental damage. All three measures had been introduced as bills in the last legislative session but stalled.
Advancing inclusive partnerships for a Maryland where all businesses and their communities thrive
The Maryland Chamber of Commerce is the state’s leading business advocacy organization — committed to working with our alliance of partners on critical public policy issues. With a focus on economic development and grassroots advocacy, we impact policies that directly affect Maryland business.
