Last month, Google unveiled plans to invest more than $1 billion to expand its data centers in Virginia. The investment promises to create hundreds of jobs and serve as an economic engine, generating tax revenue not only in Loudon and Prince William counties, where the centers are to be located, but throughout the entire state. For Virginia, this sort of economic development is not unprecedented. The state is currently ranked as the second-best state for business in the nation.
Meanwhile, Maryland stands at a crossroads, holding the necessary ingredients to be one of the most competitive states but consistently losing out to those around us. Maryland beat Virginia in job growth for four consecutive years between 2015-2018. Maryland was open for business then, and we can be again.
With a prime location in the mid-Atlantic, world-renowned academic research institutions such as Johns Hopkins and the University of Maryland, and a highly skilled workforce that ranks among the best in the nation, it should be a top destination for businesses. Yet Maryland does not rank in the top 10.
Our inability to attract business has a tangible impact on the lives of everyday Marylanders. In January, our comptroller released a report indicating that our economy has not seen substantial growth since 2017. Between the lack of new economic opportunities and persistently surging costs, we are witnessing a decline in the state’s residents and a widening gap between Virginia and Maryland’s economic growth.
As we look to reverse this trend, Maryland must do more to incentivize growth and reduce bureaucratic obstacles.
By offering tax incentives and grants, the Commonwealth was able to reign in billions of dollars in investment from companies like Amazon. More broadly, in 2023, the industry provided the state with over 26,000 jobs, $640 million in state tax revenue, and $47 billion in total economic output.
Recognizing the value data centers can bring, former Gov. Larry Hogan took proactive steps to provide tax incentives to encourage data center development in 2020. While current Gov. Wes Moore is continuing the momentum by providing new incentives in this year’s session, such as streamlining regulatory processes for the industry, we have not addressed the other central issue for Maryland’s economy: overregulation.
This past session, that issue became even worse. Counterintuitive to Governor Moore’s goal of bringing data center growth to our state and uplifting small businesses, lawmakers passed significant, overreaching data privacy legislation. While their intent was reasonable, the legislation they finalized will severely hamstring small business owners across the state, while continuing to pull back the welcome mat from future investments.
Contrary to Virginia’s sensible and clear opt-out provision, Maryland’s new privacy bill essentially calls for our state’s businesses to secure opt-in agreements for processes like customized online experiences and ad measurement. Not even California, the first state to enact major privacy legislation, requires such a provision. As a result, only larger firms with deep pockets will be able to effectively reach their target audiences online and manage the compliance requirements required to do so — harming the vibrant competition in our state’s economy and putting small, locally grown businesses at a steep disadvantage.
As Governor Moore works toward welcoming meaningful investments in the state, we should hope the administration keeps in mind the need to improve our competitive positioning in the region. To break this trend, our course is clear: take a page from Virginia’s playbook and cut out unnecessary red tape while encouraging the growth of promising new industries. By taking these sensible steps, we can unleash Maryland’s full potential and once again make Maryland Open for Business.
Michael Gill (mgill@evergreenadvisorsllc.com) served as Maryland’s secretary of commerce from 2015-’19 and 2022-’23. He also served as the state’s secretary of business and economic development in 2015, among other roles.