A recap of this week’s top-five news items and resources from the intersection of business and government.
1. Announcements begin rolling out regarding shakeups in the Maryland legislature
This week, Gov.-elect Wes Moore (D) announced the selection of state Sen. Paul Pinsky (D-Prince George’s) to head the Maryland Energy Administration, creating a dramatic change at that state agency and a cascading set of dominoes that should shake up the leadership teams in both houses of the General Assembly.
Moore also announced that Mollie Byron, a seasoned government hand in the state, will serve as director of Intergovernmental Affairs for his administration.
After Moore’s announcement, Senate President Bill Ferguson (D-Baltimore City) unveiled his restructuring plan for the upper chamber, which will involve restructuring the Senate Education, Health and Environmental Affairs Committee, with one of the broadest portfolios in the General Assembly, to the Senate Committee on Education, Energy and the Environment (EEE).
Rechristened, EEE will handle all energy and utilities-related legislation, to better reflect the intersection of energy and utilities policy with environment and climate change priorities. The Senate Finance Committee, which previously tackled energy and utility policy, will now have jurisdiction over all health occupations and alcoholic beverages legislation, aligning issues related to public health and business regulation.
Ferguson has selected Sen. Brian Feldman (D-Montgomery), the current vice chair of Finance, to head the EEE panel. Senate President Pro Tem Melony Griffith (D-Prince George’s) is his choice to chair Finance.
2. With 30 days left in office, Maryland Gov. Hogan reflects on his record and where to go next
With only a month left of an eight-year stint as the state’s chief executive, Gov. Larry Hogan recently reflected his wins, fumbles and where he’d like to see the state of politics head next as he prepares to pass the baton to Democratic Gov.-elect Wes More, who will be inaugurated on January 18.
Hogan said that he is the most proud of Maryland’s economic turnaround — something he campaigned on in 2014. He is leaving the state with a $5.5 billion surplus, thanks in part to federal pandemic relief funds. Hogan also recounted some of the challenges and fumbles faced during his tenure.
3. State approves final two leases to move State Center workers downtown
On Wednesday, the Maryland Board of Public Works approved the final leases for a 12-agency migration of state agencies from State Center to downtown Baltimore, a move which will result in thousands of state workers relocating the central business district in the coming few years. The move is expected to offer a long-awaited boost to the area that has struggled with office vacancy rates in the double digits.
Meanwhile, plans for the future of the 28-acre State Center footprint are moving forward. The Board of Public Works Wednesday approved a $500,000 grant to the city to pay for planning for the site’s next chapter. A plan to declare State Center a surplus state property and turn the site over to the city for redevelopment was outlined this summer by Lt. Gov. Boyd Rutherford as a way to help revitalize West Baltimore with a transit-oriented development linked to the light rail and MTA bus routes.
4. What to expect for the economy in 2023
After convening its Chief Economics Committee to discuss members’ outlooks for the economy in 2023, the U.S. Chamber of Commerce released a report outlining their economic outlook predictions.
The consensus among Committee Members is that the U.S. will experience a mild but short recession in the middle of 2023 caused by consumer and business spending falling because of rising interest rates.
Additionally, Chief Economist Joe Brusuelas from audit, tax and consulting firm RSM US, noted that businesses are finding it increasingly difficult to pass along higher prices to customers through price increases, which will likely mean shrinking profit margins for businesses.
Members pointed out this will likely be the first recession in memory where there will be no extra assistance, other than automatic stabilizers, from fiscal or monetary policy.
Congress sending recession relief to families and the Federal Reserve loosening monetary policy would both make inflation worse, and hence be self-defeating. Families and businesses will have to weather the economic downturn with the resources already available to them.
5. Congress wants to overhaul retirement plans. Here’s what might be coming.
Lawmakers are considering a massive $1.7 trillion spending bill. Folded inside are big changes to Americans’ retirement plans. Intended to boost retirement savings and access to 401(k) and individual retirement accounts, the Secure Act 2.0 is aimed at low- and middle-income workers, those strapped with student debt and people who may not yet have a long-term retirement account.
Will Hansen, the chief government affairs officer with the American Retirement Association, which advocated for Secure 2.0, told The Washington Post it’s the largest bill covering retirement in more than 15 years. “These provisions will increase the number of small businesses that are offering a plan, as well as increase the savings Americans are putting aside for retirement,” he said.
One of the key proposals for retirement savings includes automatic enrollment. Starting in 2025, most businesses would be required to automatically enroll employees in 401(k) plans. Employers would contribute 3 to 10 percent of their wages. Each year, the contribution would increase by 1 percent until it reaches at least 10 percent, though not more than 15 percent.
Businesses with 10 or fewer employees and businesses that have been open for less than three years would be exempt, along with church and government plans.
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