Issuu

2027

Legislative Priorities & Anticipated Critical Issues for Maryland

mdchamber.org

A letter from our President & CEO Behind every Maryland business is a story worth telling. It’s the family-owned manufacturer trying to find the skilled workers it needs to expand. The restaurant owner watching the cost of food, energy and labor rise while working to keep prices affordable for customers. The entrepreneur with a promising idea, deciding whether Maryland is the right place to bring it to life. Different businesses. Different challenges. But a common question: Can I build a future here? It’s a question Maryland families are asking, too. As we enter the 2027 legislative session, Maryland faces some difficult choices. Our economy grew just 11.6% over the past decade, compared with 25.1% nationally. Our state faces significant structural budget deficits, and the cost of living and doing business continues to put pressure on families and employers alike. But these challenges are connected, and so are the solutions. When businesses can afford to invest, hire and grow, more Marylanders have access to good jobs and opportunities. A stronger economy also helps generate the revenue needed to support schools, transportation and essential public services. This connection is at the heart of the Maryland Competitiveness Institute and Accelerate Maryland, new initiatives bringing research, the experiences of Marylanders and public engagement together to inform conversations about our state’s economic future. But understanding the challenges is only the beginning. We also have to make choices that move Maryland forward. The decisions made in Annapolis this session will help determine whether Maryland becomes a more affordable, competitive place to live, work and build a successful business. Our 2027 legislative priorities reflect the experiences of employers across the state and focus on practical policies that support job creation, responsible fiscal management, affordable and reliable energy, workforce development, infrastructure investment and a more predictable business environment. We recognize that none of these issues exists in isolation. Nor can any one policy solve them all. What’s needed is a sustained commitment to creating the conditions for businesses, families and communities to succeed together. Maryland has extraordinary strengths: talented people, innovative businesses, world-class institutions and communities worth investing in. We have every reason to believe in our state’s future. But realizing that potential requires us to act with purpose today. The Maryland Chamber is ready to work with policymakers, business leaders and communities across the state to make that future possible. And we invite you to be part of it.

Mary D. Kane President & CEO

Help Build a Stronger Maryland SPEAK UP FOR MARYLAND Maryland’s future is shaped by the people who live, work and do business here — and we want to hear from you. Join Accelerate Maryland to learn more about the challenges and opportunities facing our state, share your perspective and make your voice heard on decisions affecting Maryland’s future. Get started at acceleratemd.org.

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2027 Legislative Priorities 1 Business Taxes Tax policies that promote business creation and retention generate critical economic opportunities for all Marylanders. As Maryland addresses future budget deficits, the Maryland Chamber stands ready to work with the legislature and administration to achieve solutions that prioritize economic growth, responsible government spending, and job creation. Policies that promote business creation and retention expand Maryland’s tax base and ensure sustainable revenue streams that support vital public services. We urge Governor Moore and the General Assembly to develop well-balanced fiscal strategies that promote economic stability and foster job creation without disproportionately impacting Maryland’s business community. Tax policies that reduce Maryland’s competitiveness with surrounding states constrain economic opportunities for all Marylanders and risk longterm fiscal challenges for the State. Policymakers must carefully consider the trade-off between generating new revenue and enhancing Maryland’s economic competitiveness.

2 AI Solutions & Business-Driven Data Privacy The Maryland Chamber supports the development of a regulatory framework that addresses both data privacy and artificial intelligence in a manner that balances innovation with consumer protection. Maryland’s current data privacy law, passed in 2024, contains inconsistencies and compliance challenges compared to other states. It is crucial to address issues with the current law to provide businesses with clarity and reduce the burden of navigating a patchwork of regulations. Additionally, as AI continues to evolve, policymakers and business leaders must collaborate to ensure a flexible and balanced regulatory approach that fosters innovation while safeguarding privacy, ensuring ethical use and maintaining fair competition. Such an approach will enable businesses to harness the potential of AI while maintaining consumer trust and market integrity.

3 Climate Tax Policies & Energy Reliability We advocate for a balanced approach to achieving the state’s climate goals that fosters economic growth. As Maryland strives to meet the ambitious goals established under the Climate Solutions Now Act, it is imperative that we pursue strategies that do not impose undue financial burdens on our businesses and consumers. Proposed measures to raise revenue to pay for climate mitigation threaten to introduce over $1 billion in additional taxes annually, undermining the state’s economic stability amid growing budget deficits and slow economic growth. The Maryland Chamber urges policymakers to prioritize cost-effective solutions that enhance grid reliability, embrace an all-ofthe-above energy strategy that advances the development of a diversified and inclusive energy portfolio, as well as foster innovation.

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2027 Legislative Priorities (cont.) 4 Transportation Funding Solutions As Maryland continues to incentivize electric vehicle adoption and the use of fuel-efficient vehicles grows, it is imperative the General Assembly take steps to address the sustainability of the Transportation Trust Fund (TTF) and its reliance on the gas tax as a key funding source. The TTF serves as Maryland’s primary source of funding for infrastructure and transportation needs. Enhanced and sustainable long-term funding solutions are essential to support Maryland’s economy and ensure the safe and efficient movement of people and goods. The Maryland Chamber looks forward to being a collaborative partner in discussions with the legislature and administration to identify solutions that secure Maryland’s transportation future.

5 Job Creation & Workforce Development The Maryland Chamber legislation and budget initiatives that create jobs and expand economic opportunity for every Marylander. Policies that incentivize job creation and workforce development generate growth and economic mobility. Expanding apprenticeship ratios, improving access to childcare and investing in programs that directly connect Marylanders with job opportunities create direct pipelines to success for Maryland’s businesses and workers. We will continue to support legislative and budget initiatives in the 2027 session that create jobs and promote workforce development for every Marylander.

Diversity, Equity & Inclusion At the Maryland Chamber of Commerce, our mission is to advance inclusive partnerships for a Maryland where all businesses and their communities thrive. We believe that no matter the industry, diversity, equity and inclusion are business imperatives. Greater diversity benefits Maryland’s economy, businesses, communities and employees. To engage more fully in the complex challenges surrounding equity, we are prepared to listen, learn and take proactive steps toward meaningful change in the workplace and in our communities.

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Business Regulations & Operations We address regulatory issues affecting daily operations of Maryland businesses and support policies that promote a competitive business environment, regulatory certainty, efficient government processes and market-based principles. ANTICIPATED CRITICAL ISSUES: Regulatory Reform: Regulatory reform remains an important component to attracting and retaining businesses. We support efforts to cut red tape, reduce unnecessary and duplicative regulations, improve regulatory certainty and the consideration of the cumulative impact of new requirements on Maryland businesses. Procurement Reform: Comprehensive procurement reform is necessary to address a system that is notoriously cumbersome and can limit competition among service providers. We support efforts to implement and build upon Maryland’s procurement reforms to create a more efficient, transparent and competitive process. Given Maryland’s significant federal procurement presence, we support state procurement mirroring federal procurement laws when possible to provide greater consistency and uniformity across all levels of government. Permitting Reform: Streamlining Maryland’s permitting process is essential to fostering a competitive business environment. Lengthy and unpredictable approval processes add unnecessary costs and hinder business growth. We support efforts to remove barriers and create a more efficient, predictable system that encourages investment and helps businesses bring products and services to market faster, ultimately driving job creation, development, and economic growth. Antitrust: We oppose changes to state antitrust laws and regulations, such as new premerger notification requirements and changes to pro-competitive mergers and acquisitions, that would place Maryland businesses at a competitive disadvantage to those in other states.

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Civil Liability We believe the civil law system should not punish lawful commerce. Issues related to tort reform and civil liability are of interest, including opposing efforts to expand exposure to liability and damages that weaken businesses’ defenses. ANTICIPATED CRITICAL ISSUES: Non-Economic Damages: The Maryland Chamber opposes any erosion or repeal of Maryland’s longenacted caps on non-economic damages, as this would negatively impact the affordability and availability of liability insurance and expand liability exposure, creating significant risks for Maryland businesses and reducing employment opportunities. Punitive Damages: We oppose any change to Maryland’s current standard for the award of punitive damages. The current standard appropriately subjects only acts of “actual malice”, defined as meaning evil motive, intent to injure, ill will, or fraud [extreme negligent conduct] to punitive damages, which are unlimited in amount under current law. Any reduction of that standard, especially weakening the standard to award unlimited punitive damages for a variety of acts of negligence, will lead to an explosion of litigation and significantly increase the cost of doing business in the State. Contributory Negligence: The Maryland Chamber supports maintaining Maryland’s long-standing doctrine of contributory negligence, a vital defense for businesses that limits undue liability exposure and provides a fair standard for allocating fault. We oppose any efforts to weaken or replace it with comparative fault, which would tip the current balance in Maryland’s fault allocation system, expand legal liability, and create additional risks for Maryland businesses. 2027 Legislative Priorities & Anticipated Critical Issues • 6

Cyber & Technology The fields of cyber and technology are important and growing sectors of Maryland’s economy. We support the development of policies that encourage and facilitate growth, entrepreneurship and further innovation. ANTICIPATED CRITICAL ISSUES: Artificial Intelligence: Policymakers and business leaders must work together to develop a balanced and flexible regulatory framework that allows companies the freedom to utilize AI in a positive and ethical manner. It is vital to foster innovation while safeguarding privacy, ensuring fair competition and aligning Maryland’s policies with those of other states to maintain a consistent and competitive regulatory environment. Broadband Expansion and Connectivity: We support policies that encourage and remove barriers to the continued deployment of broadband technology, including 5G, throughout the state. We also support policies that remove barriers and ensure any expansion process is transparent and competitive to ensure equitable access to all parties. Data Privacy: We support addressing the inconsistencies and compliance challenges that exist in Maryland’s data privacy law passed during the 2024 session compared to the laws adopted by other states. Addressing the inoperable components of the law will provide certainty to Maryland’s business community and reduce the challenges of patchwork compliance in this complicated and nuanced regulatory area. Net Neutrality: We closely monitor any policy that would reinstate rolled-back federal regulations on the internet that creates challenges and inconsistencies for businesses that work across state lines.

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Education & Workforce Development We support an educational and vocational ecosystem focused on developing, retaining and attracting a more globally competitive workforce. We believe in strategies that seamlessly link education and workforce development and embed skills-based learning into academic instruction. As artificial intelligence and emerging technologies reshape the workplace, Maryland should equip students and workers with the skills to use these tools effectively and adapt to changing workforce needs. ANTICIPATED CRITICAL ISSUES: Apprenticeship and Intern Tax Credits and Reform: Expand the pool of apprenticeship and career technical education opportunities for the next generation of workers, while also simplifying the process to apply for a credit. We also support the recruitment and retention of skilled trades to meet current and future workforce demands for transportation and infrastructure upgrades. Apprenticeship Statutory Definition: Expand the definition of a qualifying apprenticeship to capture a greater segment of the work training population and increase the number of employers who can access apprenticeship related incentive programs. We continue to support expanding apprentice-tojourneyperson ratios in non-building trades to open more pathways to economic opportunities. Second Chance Employment: Expand career and education opportunities and attainment for justiceimpacted individuals, including individuals in the addiction recovery community and those who are currently or formerly incarcerated, while ensuring employers are protected from liability associated with hiring. Military Retirement Relief: Recognizing the many benefits veterans bring to their communities, Maryland’s neighboring states have made it a priority to recruit and retain military retirees. As a result, Maryland continues to suffer brain drain as military retirees take their talents and experiences elsewhere. With a high concentration of cybersecurity, intelligence and defense related jobs alongside major workforce challenges, it is time Maryland’s elected leaders get serious about retaining our veterans. We support the elimination of the state income tax on uniformed services retirement pay. The elimination of the state income tax on military retirement pay will make Maryland competitive in retaining veterans and their families while solving a major workforce challenge. 2027 Legislative Priorities & Anticipated Critical Issues • 8

Energy & Environment We support community and business endeavors that sustain, enhance, protect and conserve Maryland’s natural resources for present and future generations. At the same time, we work to balance environmental protection with Maryland’s energy, economic and reliability needs. Our focus includes strategies that ensure a resilient, affordable and reliable energy system. ANTICIPATED CRITICAL ISSUES: Climate Change and Greenhouse Gas Emissions: •

We closely monitor initiatives regarding renewable energy portfolio standards, clean energy and climate goals, and transportation sector requirements. We support the development of clean and renewable energy sources and transportation initiatives by advocating for voluntary, incentivedriven strategies that encourage innovation while avoiding unnecessary costs to businesses. It is essential that any policy implementation follows a reasonable timeline. These key components limit the impact on the state’s economy and ensure the protection of the manufacturing and transportation sectors.

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Transitioning to electrification, especially with aggressive timelines, places significant cost burdens on consumers, businesses and households while straining the grid’s ability to handle increased demand. With the growing state budget deficit, we urge fiscal responsibility and a focus on cost-effective solutions that prioritize reliability and avoid placing excessive financial strain on the state, ratepayers and businesses. Careful consideration must be given to avoid unreasonable increases in electric rates, ensuring that the transition does not worsen the overall financial impact.

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Finally, we support a diversified, equitable and inclusive energy portfolio, which enhances energy security, reduces dependence on a single source, and ensures a reliable energy supply for all.

Chemical Regulation: We support a science-based regulatory structure that recognizes and considers the many unique properties and applications which exist within a single class of substances. We advocate for feasible, practical regulations grounded in sound evidence, particularly for substances that are essential for safety. Recycling: We support market and science-based solutions for recycling that benefit the environment while balancing the needs of manufacturers, businesses and individuals. Permitting Reform: We support the streamlining and modernization of permitting processes to identify and eliminate unnecessary obstacles and timelines. An efficient and effective permitting process reduces the cost of doing business and attracts investment. Data Centers: We support responsible development and siting of data centers and policies that encourage continued investment in Maryland’s technology infrastructure. Maryland should provide a clear, predictable, and timely regulatory environment that protects ratepayers and communities while recognizing the significant economic development, job creation, tax base and infrastructure investment these projects can bring. We support meaningful engagement with the business community as the State develops and implements its data center policies and oppose unnecessary barriers, moratoria, or duplicative requirements that could place Maryland at a disadvantage.

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Health Care & Biopharma We believe in meaningful health care reform that allows employers to best meet the needs of their employees. We oppose mandated health benefit demands, as well as regulatory oversight and requirements. We also address issues in legislative interaction in the pharmacological discovery and development processes. ANTICIPATED CRITICAL ISSUES: Pharmaceutical Pricing and Availability: Efforts to address the affordability and availability of prescription drugs should maintain patient access, encourage continued innovation and consider the long-term impacts on Maryland’s health care market. We support appropriate safeguards and independent review before imposing or expanding drug price limits and oppose tax or regulatory policies that increase the cost of doing business without demonstrating meaningful savings for patients and employers. Maryland should pursue balanced solutions that improve affordability while maintaining a competitive and sustainable health care market. Drug Dispensing Fees: We oppose the adoption of state mandated pharmaceutical dispensing fees on private employer drug benefit plans. These fees enhance neither the quality nor availability of healthcare services in Maryland but instead drive up the cost of healthcare for Maryland’s employers and employee. Health Care Workforce: We support workforce development initiatives that help recruit, train and retain qualified health care professionals to meet Maryland’s growing health care needs. A strong health care workforce is critical to ensuring access to quality care and supporting Maryland’s health care economy. Professional Employer Organizations: We recognize the importance of open access to Professional Employer Organizations (PEOs) for small and mid-sized businesses. Allowing PEOs to offer aggregated health plans can provide greater flexibility and a streamlined approach to managing employee health benefits. Access to these services will enhance Maryland businesses’ ability to attract and retain talent while improving access to affordable health care options for their employees. Any changes to Maryland’s existing PEO policies must ensure transparency and partnership with health care partners. Employer-Sponsored Health Coverage: We support policies that preserve employers’ flexibility to provide affordable, competitive health benefits that meet the needs of their employees. We oppose mandates, assessments, or other requirements that unnecessarily increase the cost of providing health coverage or shift public health care costs onto Maryland employers. 2027 Legislative Priorities & Anticipated Critical Issues • 10

Labor & Employment We seek to maintain a balance in the relationship between employees and employers within the state and work to ensure policies are created that promote fairness and reduce excessive mandates. ANTICIPATED CRITICAL ISSUES: Employment Classification: In recent legislative sessions, proposed legislation has sought to make it more difficult for individuals to lawfully operate as independent contractors and to hold general contractors joint and severally liable for worker classification. Independent contractors lawfully provide critical services to Maryland’s small businesses, and working as an independent contractor provides economic flexibility to many Marylanders that results in meaningful economic mobility. Moreover, holding general contractors operating in good faith jointly and severally liable for the actions of subcontractors will result in general contractors being less willing to work with new subcontractors, thereby limiting economic opportunities for Maryland’s small businesses. For these reasons, we oppose legislation that seeks to prohibit Marylanders from accessing flexible economic opportunities, and we oppose legislation that seeks to cite and punish good faith businesses for actions they did not commit. Paid Family Leave Benefits: During the 2022 legislative session, the Maryland General Assembly passed a paid family leave program inconsistent with many of the best practices and definitions used in other states. After initial enactment, the Maryland General Assembly made changes to the law during the 2023, 2024 and 2025 sessions, which included modifying definitions and delaying implementation. Despite the changes, we continue to have significant concerns regarding the program’s eligibility criteria. Specifically, allowing employees to qualify for the program after working 680 hours for any employer in the state will create challenges for workforce management. Additionally, we continue to seek clarity on the provisions for self-employed individuals, and we continue to support legislation that aligns Maryland’s FAMLI program more closely with the federal FMLA, which would ensure the program works for both employers and employees. Collaboration with the Maryland Department of Labor is essential to address the program’s workability and regulations. As we near the beginning of contributions on January 1, 2027, and the rollout of benefits by January 3, 2028, we urge the Department to prioritize public outreach and education to ensure employers and employees are prepared for the program. Pre-Emption: We support legislative language allowing for a single law for the state instead of a patchwork among hundreds of jurisdictions..

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Taxation We support tax policy reform that reduces the cost of doing business. It is our goal to strengthen the state’s competitive tax climate to help attract and retain businesses, talent and investment. ANTICIPATED CRITICAL ISSUES: County and Municipal Tax Authority: Maryland is currently the seventh-most expensive state in the country to live in and the seventh-most expensive state in the country to do business in. That isn’t a coincidence. Taxes and fees at the state, county and municipal level directly contribute to a higher cost of doing business, which subsequently results in a higher cost of living. An increase in business and property taxes at the county and municipal level would negatively impact economic growth and further contribute to Maryland’s cycle of budget deficits that stem from an already stagnant economy, which was recently ranked 49th by CNBC. For these reasons, we oppose the expansion of the authority for counties to raise new or additional taxes on businesses. Business Tax Environment, Combined Reporting and Throwback Rule: We oppose the adoption of tax reapportionment schemes such as the “throwback rule”, mandatory unitary combined reporting, or any other system which creates an economic disadvantage for Maryland businesses. Combined reporting is especially problematic in uncertain and poor economic climates as it makes already volatile corporate tax revenues more unstable. Further, combined reporting has been extensively studied by Maryland and surrounding states and has been found to offer little to no economic benefit. We oppose any attempt to increase the tax on Maryland businesses organized as Pass Through Entities (PTEs) who pay their business taxes as personal income. Maryland PTEs are some of the state’s smallest businesses who already pay taxes at a higher rate than other personal income at 5.75%. Raising the rate to match the corporate 8.25% places Maryland’s smallest businesses at a competitive disadvantage to those in surrounding states or to businesses organized differently. Expanding the Sales Tax on Services: We oppose any expansion of the sales tax on services not currently listed in Maryland law. Taxing services places a disproportionate burden on small businesses as they are more likely to contract out professional services. These increased costs are often passed on to consumers, driving up prices of critical services. Tax Policy Certainty and the Data Center Tax Exemption: Maryland must maintain a stable and predictable tax environment that allows businesses to make long-term investment decisions with confidence. Efforts to repeal recently enacted tax incentives or exemptions, including the sales and use tax exemption for qualified data centers established in 2020, risk undermining that certainty. Businesses make significant, long-term capital investments based on the policies and commitments in place at the time those decisions are made, and abruptly reversing those policies can send a troubling signal about Maryland’s reliability as a place to invest and grow. Growing Maryland’s Economy: We encourage the General Assembly to evaluate all alternatives to raising taxes on businesses in our ever-changing economic environment. Our policymakers must rely on strategies encouraging business investment and creation to bring about long-term sustainable growth and revenues for the future. Making it more costly to operate a business in Maryland will have a deleterious impact on the state’s long-term economy. We look forward to working alongside Governor Moore and legislative leaders who are committed to growth, investment and job creation.

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Transportation & Infrastructure We believe improved state infrastructure boosts economic opportunity. We support policies that advance short- and long-term solutions to statewide transportation and transit needs. We support sustainably funded solutions that safely and reliably transport people and goods. ANTICIPATED CRITICAL ISSUES: 5G, Small Cell and Broadband Expansion: We support continued investment in broadband, fiber, 5G and other communications infrastructure that improves the safety, reliability and efficiency of Maryland’s transportation network. We support policies that encourage investment and deployment of technologies that improve connectivity, traffic and the movement of people and goods. Transportation and Infrastructure Funding: We support policies that prioritize the state’s investment in critical infrastructure projects, connect communities and support economic growth, while enhancing the safe and efficient movement of people and goods. This includes addressing the Transportation Trust Fund (TTF) structural deficit, addressing the transportation needs of underserved communities and adopting a comprehensive approach to sustainable, long-term funding sources. We also support the use of public-private partnerships (P3s), where appropriate, to leverage private investment and advance critical transportation infrastructure projects. Vehicle Emission Reductions: Policies aimed at meeting greenhouse gas reduction goals should consider implementation costs, market and technological feasibility, as well as impacts on businesses and consumers. Further, policy decisions tied to other state standards should consider the inherent differences in economic conditions, infrastructure and transportation needs. Transportation Project Planning: We oppose policies that create additional barriers, costs or delays for critical transportation projects or limit the state’s ability to address needed highway capacity. Transportation planning should balance environmental goals with safety, congestion relief, economic development and the efficient movement of people and goods.

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Workers Compensation & Unemployment Insurance We work to achieve a fair balance between the employer and employee in workers’ compensation claims. Similarly, we work toward policies to provide fair unemployment insurance benefits to workers without creating an undue burden on job creators. ANTICIPATED CRITICAL ISSUES: Solvency of the Maryland Unemployment Trust Fund: Every effort should be made by the state to ensure a healthy balance of the unemployment insurance trust fund. Any new funding proposals should consider the current economic landscape and cost implications for Maryland businesses. Unemployment System Reform: The business community supports an unemployment insurance system that balances the interests of both employees and employers and provides employers with clarity and transparency of the program’s operations and financial impact. Every effort should be made to evaluate potential changes against the programs of neighboring states so that Maryland businesses are not shouldered with excess burden compared to those in surrounding jurisdictions. We support transparency and accountability in the use of employer-funded administrative fees and believe any additional employer assessments should be carefully evaluated for their necessity and impact on Maryland businesses. 2027 Legislative Priorities & Anticipated Critical Issues • 14

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