Friday Five | October 21, 2022
A recap of this week’s top-five news items and resources from the intersection of business and government.
1. Comptroller Franchot urges Maryland leaders to reconsider ‘constitutionally questionable’ digital advertising tax struck down by judge
Comptroller Peter Franchot has recommended against the state defending what he called a “constitutionally questionable” digital advertising tax struck down Monday by Anne Arundel County Circuit Court Judge Alison Asti. Instead, he recommended the soon-to-be-elected governor and new legislature revisit the matter. Judge Asti found that the tax violated the U.S. Constitution’s prohibition on state interference with interstate commerce and discriminated against certain online companies while not taxing others. The law is also being challenged in federal court by trade groups, which contend that it violates the federal Internet Tax Freedom Act.
Jared Walczak, vice president of state projects at the Tax Foundation, a Washington, D.C.-based think tank, said “other states are likely to be wary of adopting a tax that a Maryland court struck down on multiple grounds.”
“Policymakers elsewhere have worried both about the local economic impact of a tax that increases the cost of in-state advertising and about the legal impediments to such a tax, and thus far, they’ve waited to see how litigation plays out in Maryland,” said Walczak, who believes the ruling is unlikely to change on appeal.
2. Md. launches $15M program to jump-start construction hiring
Last Friday, Governor Hogan announced the state’s new $15 million Jobs that Build program, on the heels of a federal infrastructure bill that will pay for projects around the country. The program will provide money to construction companies already engaged in transportation, broadband, energy grid or water system projects. Companies are eligible for up to $500,000 based on the number of employees, allowing them to offer up to $10,000 per employee for hiring and retention bonuses, training, childcare, housing costs or even transportation to work sites.
“When we incentivize the worker and knock out barriers such as transportation, housing and child care costs, we will not only have a more robust economy but we will also have the most modern and advanced infrastructure in the country,” Maryland Labor Secretary Tiffany Robinson said.
“Through this initiative, we will speak with a more persuasive voice to workers and especially to the youth of Maryland to ensure that they know there is an honorable and well-paying pathway to pursue when choosing jobs that build,” she said.
3. Md. biotech strikes deal with Gilead potentially worth more than $1.7B
Rockville based MacroGenics Inc. just struck a deal with major U.S. pharmaceutical company, Gilead, that could mean more than $1.7 billion for the Maryland biotech company. The deal gives Gilead the green light to develop and exclusively license MacroGenics’ blood cancer treatment medicine called MGD024. Gilead will also pay MacroGenics $60 million upfront, with the potential for another $1.7 billion over time for development, regulatory and commercial milestones.
Working with Gilead “will accelerate our ability to drive further development of MGD024 to the potential benefit of people living with blood cancers,” Dr. Scott Koenig, president and CEO of MacroGenics, said in a statement Monday.
The deal also gives Gilead the green light to advance two other MacroGenics research programs.
4. ‘Transformative’ new factory on track to open in 2024, employ 460 people
On Tuesday, Governor Hogan and other political leaders toured the Hitachi Rail factory that’s being built on a 41-acre site near Halfway, Md. in Washington County. The $70 million factory will employ 460 people and help sustain a total of 1,300 jobs in the region. The factory, which is slated to be finished in the first quarter of 2024, will be able to produce up to 20 railcars per month.
The factory’s first order will be building 256 new 8000-series railcars for Washington Metropolitan Area Transit Authority (Metro). The contract, announced in March, includes options for building up to 800 cars.
“When I took this role, I said I planned to grow our American business and, in particular, establish a strong base in the USA,” said Andrew Barr, Group CEO for Hitachi Rail. “So this plant today is the realization of that goal. And I’m really looking forward to featuring it very strongly in our plans for the future.”
5. How technology is helping businesses grow while maintaining cyber resilience
While some may think cybercriminals only target large, multinational organizations – new reports show businesses beyond just enterprise-level companies need to take cybersecurity seriously. One reason bad actors may be targeting small businesses is that security and IT tend to be an underserved function for smaller organizations due to limited staffing and skills.
In honor of October being Cybersecurity Awareness Month, Dan Carr, Regional Vice President for Comcast Business, spoke with the Baltimore Business Journal about the importance of maintaining cyber resilience as a company grows.
“Our data shows these attacks hit businesses across every vertical — from small businesses to enterprise-level organizations in government, IT, health care and education institutions, among others,” Carr said. “However, the health care and education sectors remain top targets.”
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