Tom Perez Will Be Good for Business – By Oz Bengur and Andrew Kleine

By some measures, Maryland is the wealthiest state in America, home to a diverse, highly educated workforce and federal government that put us on the cutting edge of bioscience and cybersecurity, two high-tech fields with great potential.

We have a lot going for us, but there are signs that Maryland’s economy is falling behind.

Over the past decade, Maryland’s private sector employment has grown at only about half the rate as the rest of the country, a trend that has gotten worse during the COVID recovery.  While the nation is now within just 1 million jobs (0.7%) of the February 2020 level, Maryland is one of only three states that are still more than 6% lower than their pre-pandemic employment numbers (the others are New York and D.C.). In light of these numbers, it’s no surprise that, according to the latest Goucher College poll, 33% of state residents say their financial situation is worse than a year ago, while only 19% say it’s better.

One cause of Maryland’s jobs deficit is a lack of business start-ups.  Even as the number of new business establishments nationwide has grown by 7% since before the pandemic, Maryland has lost businesses. On measures of entrepreneurship and small business climate, the state falls below average, and perhaps more troubling as we look to the future: our young adults are leaving the state.  According to the U.S. News 2021 Best States for Business ranking, Maryland was 46thin growth of the 25-29 year old population, meaning that a key part of our population actually shrank.

Like most states, Maryland is enjoying the fruits of a rapid recovery from the COVID economic shock and billions of dollars of federal aid.  The state budget outlook flipped from chronic shortfalls to record surpluses, which the Governor and General Assembly have used to boost reserves, cut taxes, and fund important priorities such as education, child care and crime prevention.

The problem is that federal COVID relief funding is temporary and the Department of Legislative Services projects that the state’s budget could be back in the red within five years.  That’s without accounting for a recession, which many economists fear could result from the Federal Reserve’s anti-inflation actions.  For Maryland, the state with the highest concentration of federal jobs, President Biden’s plan to reduce future budget deficits is yet another economic red flag.

While the current governor likes to say that Maryland is open for business, the facts tell a different story. Maryland’seconomy is not fostering enough entrepreneurship, not generating good paying jobs for all who want them, and not keeping our talented young people at home.

Tom Perez won’t just open the door for business, he will proactively support small businesses and start-ups by making more growth capital available to entrepreneurs, holding banks accountable for local lending obligations, and fostering community-based lenders.  He will expand opportunity for minority businesses to participate in state contracts, an area where the current governor has fallen far short of inclusive purchasing goals.  Maryland can also be a leader in the development of a “green economy” that addresses climate change by promoting alternative energy sources like offshore wind, establishing a network of electric vehicle charging stations and investing in more efficient public transportation.

As a former Maryland and U.S. Labor Secretary, Perez has a deep understanding of how to develop a competitive workforce. He will support job-seekers so that they can complete workforce development programs, including opportunities to “earn and learn,” with childcare and transportation for those who need it.

Maryland ranks poorly as a place to do business for its tough regulatory environment. As a case in point, the state was given a D- grade for tax administration by the non-partisan Center on State Taxation. Without sacrificing environmental, safety and worker protections, a Perez administration will conduct a “green tape” review of business regulations to find and fix (or scrap) outdated regulations that impede business and job growth.

Maryland’s next governor must be ready with an economic strategy that benefits all Marylanders, positions our state for long-term growth, and ensures funding for the Blueprint for Maryland’s Future, an historic investment in the education of our children.

From Western Maryland to the Eastern Shore, from the Chesapeake Bay to the I-95 Corridor, from Baltimore to the DMV, each region of our state has its own unique assets and needs. Perez’splan tailors solutions for each region of our diverse state and each sector of our economy and will put a special focus on Baltimore to reverse its population loss, revitalize its neighborhoods, and make it a dynamic center of commerce and a magnet for young people looking for opportunity.

 

Oz Bengur and Andrew Kleine

Oz Bengur is a Managing Director at Bengur Bryan, a Baltimore based investment banking firm and a Special Advisor atExeter Street Capital Partners

Andrew Kleine formerly was budget director for the City of Baltimore and Chief Administrative Officer for Montgomery County