O’Malley’s Taxes, Regs Drove Jobs Out Of Maryland, Hurt Its Poor

Ethan Barton | Managing Editor

Former Maryland Gov. Martin O’Malley took executives from more than 100 firms on official overseas junkets to stimulate foreign trade, but his economic policies drove businesses and residents from the Old Line State, and especially hurt its poorest regions.

O’Malley’s campaign this year has gone nowhere, but his record as governor will get much deeper scrutiny in coming days if former Secretary of State Hillary Clinton’s public credibility continues to plummet, with a result that increasing numbers of Democrats look for more attractive alternatives for their party’s 2016 presidential nomination.

“Obviously, his economic policy has severely affected the state of Maryland,” said conservative think tank Maryland Public Policy Institute President Christopher Summers told the Daily Caller News Foundation. “It hasn’t just hung an anti-business sign on Maryland. It’s carved it in stone.”

Participants On O’Malley’s Trips And Nearby Incomes
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Four trips ferrying at least 111 Maryland businesses to countries like China, India and Israel resulted in deals worth at least $345 million, according to statements from O’Malley’s office. All but seven of the businesses hailed from the Baltimore-Washington metro area because that’s where industries with potential for foreign trade, like biotechnology, are mostly located.

During O’Malley’s administration, however, Maryland saw an outflow of both businesses and residents, due according to Republicans to his high taxes and costly regulations. Republicans point to what they view as 83 tax increases as evidence.

Economics and tax policies were the decisive factors in the November 2014 decision by voters in the extremely Blue State to put Republican Larry Hogan in the Governor’s Mansion in Annapolis instead of O’Malley’s lieutenant governor and hand-picked successor, Anthony Brown.

“The O’Malley administration didn’t have an economic development plan,” Summers said. “They had a tax plan. If Maryland really wants to increase its economic competitiveness, it needs to push the reset button and go back to pre-2007 income tax levels.”

Tax hikes came so frequently, Summers said, that “it became ‘gosh, what are they going to tax next?’”

The state lost nearly 6,000 businesses from O’Malley’s 2007 inauguration to 2013, according to U.S. Census Bureau data. Meanwhile, more than 14,600 residents left Maryland along with their tax dollars between 2010 and 2013, making the state the 16th worst in the nation for outflow migration, according to state officials in the Department of Planning.

“One of the big problems under O’Malley was the migration out of the state,” said Maryland Public Policy Institute fellow Marta Mossburg. “Even people who are okay with larger government are saying ‘enough.’ People feel like they’re ATMs for the government.”

It’s not just that businesses, like Beretta, are leaving Maryland. Companies, like Northrop Grumman, are also choosing to open new offices in surrounding states.

“When you’re a business owner and you see what’s going on, you’re afraid to expand in Maryland,” Mossburg said. “They’re like ‘why should we stay here?’”

Additionally, O’Malley’s policies disproportionately hurt Maryland’s rural, economically distressed regions.

“Income inequality under O’Malley has actually grown,” Mossburg said. “People with high incomes are moving out and people with low incomes are moving in.”

Maryland’s inflow is primarily from illegal immigrants, Mossburg said.

The sales tax increase to 6 percent under O’Malley, for example, especially affected eastern Maryland businesses because of their proximity to tax-free Delaware, according to Wicomico County Republican Councilman Marc Kilmer. Residents save money by shopping across the border, especially for big purchases.

“Furniture stores have congregated on the Delaware line, because the sales tax will add up,” Kilmer said.

O’Malley’s environmental regulations also hit the rural, poorer areas harder than affluent central Maryland. A regulation to limit how much chicken manure could be used as fertilizer was estimated to cost farmers between $22 million and $52 million, according to a Salisbury University study. That’s even after farmers receive government subsidies.

“The chicken industry is one of the major drivers of the eastern shore,” Kilmer said. “Martin O’Malley was enacting liberal policies … for something to point to when he’s running for president.”

Even Perdue AgriBusiness, a major cog in the Maryland-based agri-giant with $6 billion in annual sales, is moving 150 jobs to Delaware.

Among Hogan’s first acts as governor was delaying the manure regulation.

Meanwhile, the state’s affluent counties surrounding and between the District of Columbia and Balitmore are among the country’s richest, so they could afford the new expenses, especially given their proximity to and dependency on the federal government and contractors.

“One of Maryland’s biggest problems is that it’s so reliant on the federal government,” Mossburg said.

“You have thousands and thousands of employees with no fear of ever losing their job,” Summers said.

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