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Why Does Maryland Lag Behind Virginia in Job Growth?

A five-letter word could be the culprit.

Maryland has a higher corporate income tax than neighboring states. Is that why it's unemployment rate is higher? File | Patch
Maryland has a higher corporate income tax than neighboring states. Is that why it's unemployment rate is higher? File | Patch

Why does Virginia have stronger job growth than Maryland? 

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, told the Baltimore Business Journal that Maryland’s tax and regulatory climate is one reason cited for why other states are outpacing Maryland in job growth, payroll growth and manufacturing.

“People here tell us regulatory and tax policy is having an impact on activity,” Lacker said after an appearance at the Maryland Bankers Association’s First Friday Economic Outlook Forum.

Maryland’s 6.4 percent unemployment rate in November was higher than that of neighboring Virginia’s 5.4 percent, according to the Bureau of Labor Statistics.

Lacker didn’t say he believes that taxes and regulations in Maryland are hurting business expansion in the state, the Business Journal reports.

But his visit came as the General Assembly session starts this week, with some lawmakers expected to again push for cutting Maryland’s 8.25 percent corporate income tax rate, the Business Journal says. Virginia, for example, has a 6 percent corporate tax rate.

Read the full story on the Baltimore Business Journal website

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