Gov. Wes Moore says Maryland’s economy is lagging behind the region and the country in growth
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OCEAN CITY, Maryland — Maryland Gov. Wes Moore (D) warned officials gathered at a beachside conference on Saturday that the state’s lackluster economy needs to change.
“Put simply, our economic engine does not support our ambitions,” Moore said.
The first-time politician, who began his career as an investment banker, sat through dismal economic data showing Maryland residents are falling in earning power relative to their neighbors — while families in New Jersey saw personal income rise by $1,700 last year , Maryland families saw a $1,700 rise by just $1,000, he said in a speech that alternated between lofty tones about the state’s potential and sober tones about its presence.
Adjusted for inflation, the economy is essentially the same size as it was four years ago — growing 0.2 percent between 2018 and 2022, compared with 3.1 percent in neighboring Pennsylvania and 7.5 percent nationally. Moore argued that the state’s gross domestic product has grown at half the rate of the country’s over the past decade because other states have made strategic investments that Maryland has not.
“Look around,” he said. “Our neighbors are choosing intent over complacency. Our neighbors choose growth instead of stagnation. It gives them stronger economies with greater opportunities. It gives them more flexibility to do great things. And we must choose to do the same.”
Moore’s 25-minute address to local and state officials closed a four-day conference best known for its chatter with a concrete call to action and a minute-long standing ovation.
Maryland has yet to regain the jobs lost since the pandemic, while the country has added about 4 million jobs overall. Economists say Maryland’s low unemployment rate is due in part to a declining population: job seekers are moving elsewhere, effectively leaving the state’s workforce. The state is a laggard in turning its rich pool of federal research funds into businesses that generate wealth for residents and the state’s balance sheet, Moore said.
He outlined his plan to grow the economy in broad terms rather than specific incentives.
He said he wants to use the state budget as a vehicle to invest in high-growth industries that Maryland already has the economic infrastructure to support, particularly cyber and artificial intelligence. Maryland is the home of the National Security Agency and the Defense Information Systems Agency, among many federal agencies.
“Discipline will be what drives us forward: the discipline to work together; the discipline of being innovative; “The discipline of choosing the difficult over the easy,” Moore said, shortly after telling the crowd at the Maryland Association of Counties conference that looming budget deficits require “restraint.”
“And yes, it will require the governor’s discipline,” he said. “As much as I want to say yes, you’re going to hear a few nos. The time for discipline is now.”
Moore’s speech comes at a time when the governor faces bleak financial prospects for his ambitious program, which includes ending child poverty in part through a $4 billion annual education program and rolling out large, multi-billion dollar infrastructure projects.
After three years of federal budgets inflated to historic surpluses — driven primarily by pandemic relief and residents’ gains from a soaring stock market — Maryland’s annual budget of $63 billion is expected to show a deficit of $418 million in fiscal 2025 1 $.8 billion in 2028.
Much of the budget shortfall is due to an ambitious education plan known as the “Blueprint for Maryland’s Future,” which aims to increase student achievement across the state and create an effective path for students to graduate high school with a career – or want to leave non-university destination. and support children from areas with high poverty. But even excluding planned education spending, Maryland’s revenue is expected to grow 3.3 percent annually while spending will rise 5.1 percent, according to a June report by the Maryland Department of Legislative Services.
State officials have saved $2.5 billion from pandemic generosity, but that’s not enough to cover new programs or the education plan’s long-term annual costs once it’s fully implemented.
Moore’s first step in solving this fiscal problem is to increase government revenues by growing a sluggish economy.
“Now is the time to look at the challenges in our household as an opportunity to reshape our future. As our economy grows, we will have more to work with,” he said.
I am confident that if we show the courage that is required at this moment, if we move forward, if we act with ingenuity and discipline, we will prove ourselves worthy of the future we aspire to.
Let’s all step up, make strong decisions, and do our part to help shape this decade in Maryland. pic.twitter.com/70PEesK7FF
— Governor Wes Moore (@GovWesMoore) August 19, 2023
Without mentioning budget cuts, Moore suggested belt-tightening across the state: “We need to increase restraint as we approach the New Year. This will be a disciplined season and our decisions must reflect that.”
Moore pointed to two states as examples of places where strategic, early investment has created economic powerhouses.
“The economy is changing. And do you know who knows that too? Our competitors,” Moore said. “Who would have thought 20 years ago that Kentucky — Kentucky — would be the battery manufacturing capital for electric vehicles? But, you know what? They did. They saw the electric vehicle revolution that was happening and decided to bet on it.”
Referring to the economic boom in the biotech industry in Massachusetts, he said, “Maryland has the potential to dominate industries both now and in the future.” Now all we need is a strategy and the discipline to harness that potential actually exploit.”
The call to action was delivered along with a joke about too many district leaders being seen in shorts and a call for action on the birthday of his transport minister. It included a hilarious boast that residents from surrounding states would move to Maryland once they saw the work they were doing.
“When we succeed, the people of Virginia, New Jersey, Pennsylvania and Delaware will love them with all their hearts, but they’ll look up and see what we’ve done and they’ll envy our strength,” he said. “And guess what? They’re going to be Marylanders.”
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