Blog
It’s Never Just One Thing: What Maryland’s Business Rankings Are Really Telling Us
Jul 15, 2026
A business rarely leaves a state, or decides not to grow in one, for a single reason. It's the accumulation. That's what Maryland's four-year slide in the CNBC business rankings is really measuring, and it's a signal businesses are already reading.
Ask a business owner why they left a state, or decided not to grow in one, and you'll almost never get a single reason. It's rarely one tax or one bad year. It's the accumulation: a little more cost, a little more paperwork, a little less certainty, year after year, until the math finally tips and the door across the state line looks easier than the one they've always used.
That's worth remembering while reading Maryland's latest business rankings, because it's tempting to treat them as a scoreboard. They aren't. Behind every ranking are thousands of quiet decisions by real people: whether to open a second location, add a shift or cut one, whether a new graduate builds a career here or three states south, whether a family business can still afford to stay. The ranking is just the sum of those choices. And for four straight years, those choices have been adding up against Maryland.
The point, up front: This isn't a business complaint. Business growth is how Maryland creates almost everything people actually want: jobs, opportunity, economic mobility and the tax base that pays for schools and roads. When the state makes it harder and more expensive to do business, that cost doesn't land only on employers. It shows up at the register, in fewer jobs and fewer opportunities and in the people and companies who quietly decide to build somewhere else. Maryland's slide in the rankings is a problem that concers every Marylander.
Four Years, One Direction
When CNBC released its 2026 America's Top States for Business rankings this month, Maryland came in 36th. That's easy to shrug off as a rough year, but it isn't one year. Maryland has slipped every year since 2023, from 22nd to 31st to 32nd to 36th. Only one state in the country, Oregon, has fallen further.
Zoom out to a full decade and the four-year slide looks less like a stumble and more like a direction. Maryland has been a middling business state for ten years, mostly ranked in the 20s and low 30s. It's one strong showing — 12th in 2021 — turned out to be a one-time blip from a change in how CNBC scored that year, and it vanished the next. This isn't a bad year to bounce back from; it's a trend that's been building.
And here's the uncomfortable part: Maryland's neighbors didn't slide with it. Pennsylvania, Virginia and the rest of the region mostly held their ground or climbed. This isn't a regional downturn dragging everyone down together. Maryland is the outlier.
Federal Layoffs Didn't Start the Slide
The easy explanation for this year are the real and large federal workforce cuts. Federal spending and employment make up roughly 30% of Maryland's economy, more than almost any other state. In 2025 alone, Maryland lost about 25,000 federal jobs, the largest loss of any state, and over the past year its job growth ranked 47th of 50. That shock sent Maryland's economy score to 49th in the nation and helped trigger its first credit-rating downgrade since 1973.
But Virginia took almost exactly the same hit, losing about 23,500 federal jobs, and its economy is every bit as tied to Washington. Yet Virginia finished 3rd in the country this year while Maryland finished 36th. Virginia kept its top credit rating; Maryland lost its own for the first time in half a century. Same storm, very different boat.
The difference isn't the layoffs. Unlike Virginia, Maryland lacks a diversified economy. Long before the federal cuts, Maryland was already ranked in the bottom ten nationally for the cost of doing business, every single year: 47th, 47th, 46th, 44th. That's not a Washington problem. Neither is this: Maryland's own Comptroller's Office reports the state ranks among the top ten in the country for the largest net loss of residents to other states between 2022 and 2024. The top destinations are Virginia and Pennsylvania. Next door.
Federal Layoffs Didn't Start the Slide
People forget how much a business actually pays for. Taxes are only the start.
- Labor. Maryland has the third-highest median household income in the country. That's good for families, and it means Maryland businesses pay among the highest wage and payroll costs in the nation for the employers who hire here.
- Energy. Electricity already costs more than the national average here, and it's rising faster than the national average, with more increases on the way.
- Real estate. Property values run well above the national average, and commercial space is generally more expensive in Maryland than in many competing states, particularly in the Baltimore-Washington corridor, increasing the cost of locating, expanding or operating a business.
- Taxes, stacked. The highest corporate rate in the region at 8.25%, the only state with both a digital advertising tax and a separate tech tax, unusual treatment of certain foreign income, a small-business expensing cap far below the national norm, and the only state with both an estate tax and an inheritance tax. The Tax Foundation ranks Maryland's tax climate 46th in the nation, and it slipped a spot last year because the 2025 session added more.
- Unpredictable rules. Independent researchers rank Maryland's regulatory climate among the least predictable in the country, not the most voluminous. The problem is how complex the rules are, and how long it takes to get a permit.
No single item on that list sinks a business. Together they add up to a state that's genuinely expensive and hard to operate in, and the recent trend has been to add weight, not remove it.
What the States That Turned It Around Did
The encouraging part: the states now at the top didn't get there with magic, and most didn't do it with one dramatic move. They did two things, consistently, over years.
They made costs predictable. North Carolina's corporate tax is 2% today, on a path written into law to reach 0% by 2029. A company weighing a 20- or 30-year investment can plan around that, and North Carolina's own recruiters lead with it. Georgia did the same with a rate schedule set years in advance. The exact number matters less than the certainty: businesses can build around a known future in a way they can't around a new surprise every session.
They invested in growth. Ohio, now number one, backed its tax reform with about $175 million a year to get sites ready for construction, roughly six times what Virginia spends. That doesn't touch the tax code at all, and it moves the categories CNBC now weights most heavily, including infrastructure and permitting speed. These are among the least contentious levers a state has, and they're where the top performers put their money.
And the competition is right next door
Maryland doesn't have to look to the Midwest or the Sun Belt to find states doing better for business. It shares a border with several of them, and on the cost of doing business, it finishes behind all of them, every year.
- Pennsylvania climbed to 17th in the country this year.
- Virginia sits at 26th, with a simpler tax code and a top-five overall finish for years running.
- Delaware has stayed ahead of Maryland every year measured.
- West Virginia, even after a steep decline of its own, still beats Maryland on cost every single year.
That last one is worth sitting with. A state that just fell more than 20 spots is still a more affordable place to do business than Maryland.
Businesses rarely say publicly why they leave. By the time a company will talk about it, the decision is usually already made, and there's little upside for them in airing it. So this isn't a story told in press releases. It's the quieter version of the same pull already visible in the resident numbers: the conversations in boardrooms and around kitchen tables about whether it still makes sense to grow here, or whether the better opportunity is one state over.
Why This Matters, and Why It Isn’t Only Business’s Problem
It's easy to read all of this as a business complaint. It isn't, and framing it that way misses the point.
Business is the engine, not the obstacle. Business growth is how a state creates almost everything people want: jobs, opportunity, upward mobility, and the tax base that pays for schools, roads, and services. When a company expands, it hires; when it hires, families gain stability, young people find a reason to stay, and communities grow stronger. Businesses aren't the obstacle to a thriving Maryland. They're one of its main engines, and most want to be exactly that.
"Fair share" gets it backward. The yearly push to make businesses "pay their fair share" misreads the problem. The numbers here show Maryland's employers already pay among the most in the region, by nearly every measure. What they're asking for isn't a break. It's a fair opportunity to grow, and to stop being treated as the state's ATM every time the budget runs short. A business that feels like a target doesn't expand. It hedges, or it leaves.
Affordability runs through a stronger economy, not around it. Affordability is a goal almost everyone shares. But making it more expensive to create jobs, invest and do business doesn't make life less expensive — it often shifts those costs elsewhere through higher prices, fewer jobs, slower wage growth or fewer opportunities. Nearly four in ten Maryland households already struggle to consistently afford basic needs, even while working. The businesses that create jobs, raise wages and generate the tax base that funds schools, roads and public services are part of the affordability solution — not separate from it.
And the clock is running. The state is staring down a projected budget shortfall of $2.8 billion in fiscal 2028, widening to $4.5 billion by 2031, driven largely by the underfunded Blueprint education plan. Gaps that size are hard to close, and proposals to raise taxes on businesses and top earners are already on the table. That expectation, more cost on an already-heavy load with little certainty about what comes next, is itself the competitiveness problem.
What Signal Do We Want To Send?
Come back to where we started. Every ranking is really a stack of human decisions: whether to build here, hire here, stay here, come back after graduation. Maryland has been losing a few of those every year, to states that made a deliberate choice to compete for them.
Fixing it doesn't take a single dramatic move. What businesses are asking for is steadier ground: predictability instead of a new surprise each session, investment in what helps them grow and a state that stops adding to the pile.
Maryland has to decide, on purpose, what kind of place it wants to be for the people who invest, build and hire here. Other states have already shown what works. The most useful question isn't where Maryland landed this year. It's what signal it wants to send next.
Transparency Note: AI was used to assist with research synthesis and drafting. The analysis, conclusions and final editorial review were completed by the Maryland Chamber of Commerce.
Sources:
- CNBC, "America's Top States for Business," 2023–2026 full rankings and 2026 methodology
- Tax Foundation, 2026 State Tax Competitiveness Index; U.S. Census Bureau, state population, migration, income, and housing estimates
- U.S. Bureau of Labor Statistics, state employment data
- Brookings Institution and Maryland Comptroller's Office research on federal spending exposure and resident out-migration
- Maryland Governor's Office budget projections (fiscal 2028–2031)
- Maryland Office of People's Counsel and utility rate filings
- Mercatus Center regulatory research
- Moody's Investors Service
- EDPNC and Georgia.org economic development materials
