Maryland’s first State of the Economy report finds almost a decade of stalled economic and population growth

Last week (Jan. 3), Maryland’s state comptroller released the state’s first State of the Economy report. The 110-page document uses publicly available data, academic research, and government studies to analyze relevant economic indicators within the state. It compares that data across neighboring states and nationally to better understand the current economic climate and to help Maryland policymakers understand the sources of weakness, as well as identify the strengths and opportunities available, and to leverage those resources for more sustained, long-term economic growth.

The report found that, despite Maryland’s advantages (high median household income, low unemployment, a diverse economy, and proximity to academic research universities and federal agencies), the state’s economic growth has been slowing since 2017, with the state’s population growth sputtering years before the economic and wage growth stalled (all of which happened well before the COVID-19 pandemic), and remains stagnant today. The analysis also reveals that Maryland substantially lost lower- and middle-income workers to other areas with cheaper housing, and a larger number of working women left the state’s workforce as compared to other states.

While the report does not prescribe policy solutions, it recommends that lawmakers focus on addressing the state’s affordable housing problems and lack of access to child care. It is expected that lawmakers will fully review the report's data, recommendations, and other discussions as part of the FY 2025 budget process, which is starting amid recent revenue reports showing the state’s roughly $63 billion operating budget is now projected to have a $761 million deficit in fiscal year 2025 (which begins in July), with shortfall projections to reach $2.7 billion by fiscal year 2029. The operating deficit has grown in recent months because of lower-than-expected sales tax revenue and added costs related to the state-funded childcare assistance program.