Friday Five | August 11, 2023
A recap of this week’s top-five news items and resources from the intersection of business and government.
1. Maryland among states with highest loss of high-earning residents
Maryland is one of the leading states experiencing a loss of high-earning residents who are choosing to migrate to states with lower income taxes and a cheaper cost of living. Maryland had the sixth-largest net outflows of high-earning households, trailing California, New York, Illinois, Massachusetts, New Jersey and Virginia, according to a new report from SmartAsset. Experts say that while state tax rates have always contributed to this kind of migration, the growth in remote work has made moving to a low-tax state more feasible.
What does this mean? As the migration out of Maryland to more business-friendly states continues, our state is at risk of a diminished labor force, smaller tax base and potentially fewer future job opportunities.
2. How new banking rules could harm your business
Federal banking regulators have proposed raising capital requirements for American banks. This would increase costs for consumers and make it harder and more expensive for businesses to grow. Banks would likely make fewer loans, and businesses looking to obtain financing to expand would have fewer financing options at higher prices. Without fully demonstrating the need, regulators have proposed to significantly increase the cost of accessing capital across the American economy. This will slow Main Street growth at a time when businesses are signaling a desire for more credit.
Why it matters: Tougher bank regulations would make bank credit more expensive for borrowers, which could hurt investment and economic growth, especially for small business and local economies.
3. Over $87 million spent on cannabis in Maryland’s first month of adult sales
Marijuana users spent $87.43 million on cannabis in Maryland during a strong first month of recreational sales, according to state officials, spending an average of about $2.8 million on the substance each day in July. Industry leaders also credited lawmakers for setting the tax on cannabis at 9 percent, which they say allows legal weed prices to stay low and be competitive with the black market. Maryland’s cannabis sales and use tax reaped $4.61 million for the state in July, according to the Maryland Cannabis Administration.
What’s next? There is still work to be done for the state to meet its social justice and equity goals by increasing diversity in the marijuana industry. State leaders hope to advance economic equity with its next round of recreational licenses, slated for this winter.
4. SCOTUS strengthens employer obligations for religious accommodations
A recent Supreme Court ruling toughens the rules for private and public employers to accommodate employees’ religious beliefs. The case, Groff v. DeJoy, featured the grievances of a former postal worker who sued after his request for Sundays off was denied. The unanimous June 29 ruling found that, “Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business.”
What employers should know: Employers, both public and private, should be aware of this legal precedent when evaluating employee accommodation requests.
5. Members named to new transportation commission
A new blue ribbon commission is scheduled to begin a series of hearings that could change how the state prioritizes and pays for transportation projects. Governor Moore, Senate President Bill Ferguson and House Speaker Adrienne A. Jones recently named the 31-member Maryland Commission on Transportation Revenue and Infrastructure Needs. The commission is set to hold its first meeting Aug. 24. Maryland Chamber of Commerce President & CEO Mary D. Kane is among those serving on the panel, which will meet through the end of 2024.
Why it matters: This commission has the responsibility of ensuring that Maryland is maintaining its current transportation system in a state of good repair while also building Maryland’s transportation future to prioritize access and opportunity. After all, Maryland’s competitiveness and economic strength is as strong as its transportation competence.
