Friday Five | February 10, 2023
A recap of this week’s top-five news items and resources from the intersection of business and government.
1. Governor Moore’s cabinet secretaries advance toward confirmation
Roughly half of Governor Moore’s cabinet secretaries are on their way to Senate confirmation following a unanimous vote by the Senate Executive Nominations Committee Monday evening. Next up will be a confirmation vote before the full senate. Cabinet nominees experienced relatively smooth sailing during their committee presentations, receiving few tough questions.
When senators questioned Portia Wu – nominee for labor secretary – about unemployment, she pledged to focus on improving the program which buckled due to blistering demand at the start of the coronavirus pandemic.
Next week, the Senate committee is expected to consider the next batch of secretaries – including picks Paul J. Wiedefeld for transportation and Vincent Schiraldi for juvenile services.
2. The General Assembly takes its first step toward cannabis regulation, here’s what’s in the new bill
After many months of anticipation, members of the General Assembly, lobbyists, business owners and potential new license holders were given the opportunity to examine details of Maryland’s plans for its recreational cannabis industry.
The bill’s aggressive timeline aims to get the market up and running by July 1, the date voters statewide approved in a November referendum. As of that date, Marylanders will be allowed to legally possess up to 1.5 ounces of cannabis and grow up to two plants per household. However, the draft of the bill indicates that many of the details of the new industry will not be settled until much later.
Additional details to be aware of:
- When legalized in July, recreational cannabis will be taxed at a 6% rate, and will increase annually by 1% until it hits 10% in 2028, according to the bill.
- The bill includes efforts to ensure equality in this new industry, calls for strict advertising regulations and will provide “standard” licenses for up to 300 dispensaries, 100 processors and 75 growers. “Micro” licenses would give smaller players a seat at the table.
Employers are keeping a close eye on how the recreational cannabis market will impact employment drug screenings. Currently, the government is maintaining a relatively hands-off approach toward employment drug testing. Read about this issue and other items business owners should know about the bill, set for hearing in the House of Delegates on Feb. 17.
3. Republicans renew push to eliminate state gas tax triggered by inflation
Maryland Republicans are again pushing to eliminate the automatic increase in the state’s gas tax tied to inflation. As was the case last year, the repeal is one of the top priorities for Senate Republicans in the 2023 session. Of the Senate’s 13 Republicans just one is not listed as a sponsor, with none of the upper chamber’s 34 Democrats signing-on.
In 2013, the legislature raised the gas tax for the first time in more than two decades and linked future increases to inflation over a 12-month period that ends each April. That rate does not decrease in the event of negative inflation, however, but caps increases at 8%.
Nine states, including Maryland, tie gas tax increases to inflation. This July, those rates will likely increase again. Efforts by Republicans to repeal the automatic increases have failed as Democrats point to a need to pay for expensive highway projects that have increased in part due to inflation.
4. Fed’s Powell: Strong hiring could force further rate hikes
Federal Reserve Chair Jerome Powell said Tuesday that if the U.S. job market further strengthens in coming months the Fed might need to raise its benchmark interest rate higher than it currently projects.
Though price pressures are easing and Powell said he envisions a “significant” decline in inflation this year, he cautioned that so far the central bank is seeing only the “very early stages” of disinflation.
Inflation has slowed while the unemployment rate has declined – a trend that defies most economic models. Powell said the phenomenon reflects the unique nature of a post-pandemic U.S. economy. But the Fed chair warned that the job market is still out of balance, with robust demand for labor and too-few workers in many industries, leading employers to raise wages sharply – a trend that could keep inflation high.
5. Maryland joins U.S. Climate Alliance, commits to goals
President Joe Biden’s State of the Union address to Congress Tuesday touched on many issues facing small business today.
Biden highlighted the passage of the legislation that contained tax credits and programs to help spur the development of electronics and semiconductors within the United States, as well as money for businesses through the Infrastructure Act. The President also asked Congress to pass legislation to end so-called “junk fees”, specifically hidden charges like hotel resort fees, airline ticket prices, overdraft fees and internet cancelation fees.
Regarding noncompete agreements, Biden doubled down during his speech on the efforts to ban said practices across every industry and income level. Business groups have promised to challenge a rule change in court, and experts are divided over how much authority the FTC has in banning non-competes. Covid relief fraud and unionization were also talking points during Tuesday’s address, as were matters regarding construction – with the President vowing to extend to American infrastructure a “Buy American” policy that would require all construction materials used in federal infrastructure projects to be made in America.
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