Great Letter! Keep the faith and keep fighting!

Thank you!

Thank you for your comment and feedback. It is a sad situation. Many these days in Annapolis do not understand the basic tenants of economics. Let’s keep the faith and keep fighting!

January 1, 2025

The Office of Governor Wes Moore
​​100 State Circle, Annapolis, MD 21401

Subject: How high is a ‘high bar’ for taxes?

Dear Governor Moore,

I trust this correspondence finds you and your family well, having enjoyed a Blessed Holiday and joyous New Year celebration.

I also trust this correspondence finds its way to your desk, realizing a staff member will be reviewing it for relevance.

The purpose of my correspondence is to ask how high is a high bar for taxes with the state’s deficit standing at $3Billion, which is not new news, increasing exponentially in out years? And to discuss what the consequences are of increasing taxes and fees, and potentially creating new ones.

As we know, last year during the 2024 Gen Assy session we saw increases in 335 fees and taxes due to the looming structural budget deficit a year ago. While individually incremental, cumulatively it generated a fair amount of revenue. We also know that ultimately these fees and tax increases will find their way down to increases in the cost of doing business, and ultimately impact the prices consumers pay for products and services.

CEO Magazine just recently came out with their latest survey for the 2024 best & worst states for business.
So, going into 2025, not only does Maryland have:
the 5th highest gas tax in the nation, which is automatically increased via CPI, and not very business friendly;
the 5th highest minimum wage in the nation, which is not very business friendly, but justified as Maryland is …
the 5th highest cost-of-living state in the nation, which is also not very business friendly;
but Maryland is CEO Magazine’s 35th worst state for business.

This is not the first time Maryland has ranked poorly in a ‘best & worst states for business’ ranking, as we know, similar rankings have been published by Forbes, CNBC and Wallet-Hub.

Business owners and decision making managers read this. They are knowledgeable and have spread sheets full of other decision making data and metrics; like the cost of land, construction, permits, and the permitting process; the cost of doing business, like corporate taxes, labor, overhead, G&A expenses, which impacts their state viability check-off list and ultimately their decisions on where to move a business, expand a business, start a business. We know the private industry sector has been stagnant in MD for some time. This latest ranking does not, obviously, help Maryland’s situation.

CEO Magazine’s ranking of the best-to-worst states in our Econ Dev region:
5th – North Carolina*
10th – South Carolina*
12th – Virginia
15th – Delaware
31st – Pennsylvania
34th – West Virginia
35th – Maryland
47th – New Jersey
[*I include NC & SC because of their $7.25 minimum wage, which is justified given their cost of living.
NC & SC are Econ Dev magnets and not that far away.]

Page 2

CEO Magazine’s ranking of the best-to-worst states along the I-95 corridor from Maine to Florida:
2nd – Florida
5th – North Carolina
7th – Georgia
10th – South Carolina
12th – Virginia
15th – Delaware
24th – New Hampshire
31st – Pennsylvania
33rd – Maine
35th – Maryland
36th – Rhode Island
42nd – Connecticut
45th – Massachusetts
47th – New Jersey
49th – New York

If you, as Wes Moore not Governor Moore, were thinking about moving your business to, expanding your business to, or starting a new business on the DELMARVA, where I live, where would you put it?
Let’s expand that to thinking about moving your business to, expanding your business to, or starting a new business in the greater Mid-Atlantic region, where would you put it?
Let’s expand that even further to thinking about moving your business, expanding your business, or starting a new business along the I-95 corridor, where would you put it?
Applying common sense and logic to the data, as you and I would, and with an acute sense for the obvious, Maryland would not make it to our short list of states to be considered.

One can only hope the 2025 Gen Assy, lead by Senate President Ferguson and House Speaker Jones, does not dig the hole Maryland is in any deeper, as neither raising fees and taxes, regardless of how high the bar, nor creating new ones, is going to entice corporations to move here, expand here, start new here.

Given that income tax is one of the main revenue sources for the state, along with corporate taxes, with 10% of Maryland’s workforce being Fed based, and likely to see that reduced, plus not being considered business friendly, well, there you have it.

We have been a spend and tax state for decades, legislating into being a number of very expensive unfunded mandates [the elephant in the room right now being The Blueprint/Kirwan] well before you and Hogan came into office; both of you inherited this fiscal mess.

Frankly, your recent Executive Order to bolster Maryland’s economic competitiveness surprised me; while idealistic, it is not pragmatic with a sense of immediacy and urgency. On the contrary, rather it is more layers of slow moving bureaucratic inefficiency.

Maryland needs to reduce spending now, live within our means now, albeit not raise fees and taxes to balance our budget now, and become more business friendly now.

I urge you, Governor Moore, to take the leadership role I admire you for and get our fiscal house in order.

With kind regards, and best wishes expressed for your continued success,
Mike Waal
Past Director of Economic Development, Kent County
Past President of the Chamber of Commerce, Kent County
Past Advisory Board Member WIB

Hiring a consultant to examine one’s fiscal policies and position makes political, if not financial sense. When said consultant recommends spending cuts, tax and fee increases or other adjustments which may prove unpopular, a governor and legislative body can defend their actions as being viewed as essential to the state’s economic future.

Either way, it is obvious that the state needs to take action — real action — to avoid a very sad situation in the short-term.