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					  Maryland’s Competitiveness:
Where We Lead, How We Lag
              Gary D. Keith
      Regional Economist – M&T Bank
            November 2, 2011



              Hyatt Regency Chesapeake Bay Resort
                     Inflation Adjusted Change From Q1 2007

           Relative Growth in Gross State Product
                        Maryland vs. United States
7%                 A Solid Recovery From the
6%                     Great Recession…                                                                   6.6%
                                                                                                          Forecast
5%             Maryland’s GDP has grown at
4%              nearly three times the U.S.
3%
                  average since Q1 2007                                              Maryland
2%                                                                                                        2.3%
1%

0%

-1%

-2%                                                                          United States
-3%

-4%
      Q1   Q2 Q3    Q4 Q1   Q2 Q3      Q4 Q1        Q2 Q3        Q4 Q1        Q2 Q3       Q4 Q1   Q2 Q3

           2007             2008                   2009                       2010            2011
                            Source: U.S. Bureau of Economic Analysis, Moody’s Analytics                              2
                                     Predicted Growth in
                           Economic Activity Six Months in the Future

                 Maryland Leading Economic Index
4%
                                              R                                                  R
                                              E                                                  E
3%                                            C                                                  C
                                              E                                                  E
                                              S                                                  S
2%                                            S                                                  S
                                              I                                                  I
                                              O                                                  O
                                              N                                                  N
1%

0%                                                                                                      0.25%
-1%
      The models include the following
      variables that lead the economy:              …But a Cloudy
-2%
      (1) state-level housing permits (2),         Outlook For 2012
      state initial unemployment claims,
-3%
      (3) delivery times from the Institute
      for Supply Mgt manufacturing
                                                        Momentum has
      survey, and (4) the interest rate                faltered since the
      spread between the 10-year
-4%   Treasury and the fed funds rate                  first half of 2011

-5%
      97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
                                                                                                     Sept
                                                  Source: Federal Reserve Bank of Philadelphia              3
      Federal Spending as a Percent of GDP
        “Super Committee” Cuts Pose Downside Risk
        Federal spending cuts could act as a stiff headwind for
35%
                Maryland’s near-term economic growth


30%
                                                                                         32.3%

25%


                               Maryland
20%
                                 2010 Rank – 6th                                         21.9%

15%
                         United States
10%

 00    01   02     03         04         05          06          07           08   09   10
                              Fiscal Year Ending September 30

                   Sources: U.S. Census Bureau, Bureau of Economic Analysis                  4
                           Public Policy Objective
Question:        How	
  can	
  Maryland	
  maintain	
  robust	
  	
  
       	
     	
  and	
  sustainable	
  economic	
  growth	
  	
  
       	
     	
  and	
  generate	
  quality	
  jobs	
  with	
  higher	
  
       	
     	
  salaries	
  and	
  long-­‐term	
  impact?

Answer:        Continuously	
  pursue	
  policies	
  that	
  	
  	
  
   	
    	
        	
     	
  accentuate	
  competitive	
  strength
    	
    	
         	
     	
  (“Where	
  We	
  Lead”)	
  and	
  reduce	
  
competitive	
   	
          	
       	
  drags	
  (“How	
  We	
  Lag”)	
  
	
  
       	
     	
  	
  	
  	
  	
  	
  	
  -­‐	
  Be	
  unique,	
  not	
  generic	
  	
  
	
  
       	
     	
  	
  	
  	
  	
  	
  	
  -­‐	
  Tell	
  our	
  story	
  to	
  the	
  world	
  	
  
                                                                                                      5
             No Shortage of Opinions…
April 2011       May 2011         June 2011      June 2011




June 2011       September 2011   October 2011   November 2011




                                                                6
   The Problem With These Type of Studies

   “How Does Maryland Really Stack Up?”
State Technology      North American          Chief Executive
& Science Index       Business Costs            Magazine
     January 2011           April 2011               May 2011



      2 nd
                           45th                    37 th
    No Change              Up 2 spots            Down 3 spots


  CNBC.com              ALEC-Laffer             Site Selection
“Best Places” Index   Competitiveness Index   “Business Friendliness”
     June 2011              June 2011              November 2011


    29 th                  21st                    21st
  Down 2 spots            Up 8 spots               Up 5 spots

                                                                        7
                                Metrics That Matter
    “Where	
  We	
  Lead”                                                         “How	
  We	
  Lag”	
  
Economic	
  Performance	
                  Business	
  Cost	
  Competitiveness	
  
Workforce	
  Quality	
                     	
  	
  	
  	
  	
  Labor	
  Costs	
  
                                           	
  	
  	
  	
  	
  	
  Tax	
  Burden	
  
Innovation	
  &	
  Productivity	
  
                                           	
  	
  	
  	
  	
  	
  Commercial	
  Energy	
  Costs	
  
Access	
  to	
  Capital	
  
                                           Liability	
  /	
  Regulatory	
  
Global	
  Focus	
                          	
  	
  	
  Environment	
  
Fiscal	
  Stability	
                      Infrastructure	
  Performance	
  
Quality	
  of	
  Life	
  	
  
                                           State	
  Pension	
  Funding	
  Gap	
  



                                                                                                           8
     Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth


       Real Gross State Product Growth 2007-10
                                                        Overall     Regional                     Avg Annual
                                                         Rank        Rank                          Growth

                                                             5              1   West Virginia         2.2%
                                                             8              2   Virginia              1.2
                                                           11               3   MARYLAND              1.0
                                                            15              4   Massachusetts         0.8

                                                            16              5   Kentucky              0.5

                                                            18              6   New York              0.5

                                                            19              7   Pennsylvania          0.5
                              1% or More                    20              8   Vermont               0.4
                              0.1% to 0.9%
                                                            23              9   Connecticut           0.2
                              0% or Less
                                                            26         10       North Carolina        0.0
     Top State:
North Dakota      5.7%                                                 U.S. Average:          -0.1%
                                 Source: U.S. Bureau of Economic Analysis                                     9
Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth


       October 27, 2011                Economic complexity reflects the
     Harvard University & MIT          amount of knowledge embedded
                                       in the productive structure of an
                                       economy

                                       Over time…it explains 75% of the
                                       variance in GDP and per capita
                                       income across countries

                                       The most prosperous societies hold
                                       a diversity of knowhow and are able
                                       to recombine it to create a larger
                                       variety of smarter/better products
                                       and services

                                       The policy message is clear: Create
                                       an environment—and workforce—
                                       where productive activities that are
                                       relatively more complex can thrive
                                                                                   10
                                         Change From 2000

                Relative Change in U.S. Real GDP
                        by Industry Sector
40%             “High Value Added” Services
                Information, professional, scientific, business
                                                                                   Recession	
  
35%             real estate, heath care and education services

30%             Manufacturing, construction, mining

25%             All other private sector industries
                                                                                                         28.9%
20%


15%
        R
        E
                                                                                                         17.6%
        C
        E
10%     S
        S
        I
        O
 5%     N	
  


 0%


-5%
                                                                                                         -1.2%
-10%
   00   01           02        03        04          05         06          07      08             09   10
                                        Source: U.S. Bureau of Economic Analysis                                 11
  Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure           Share of State GDP Derived From
                  “High Value-Added” Services—2010
Why it Matters    States with large clusters of high value-added service providers*
                  are better positioned to have above average economic, job growth
             Top 10 States                                              Bottom 10 States
  Rank                       GDP Share                   Rank                                        GDP Share

   1     Massachusetts         49.1%                       41      West Virginia                         29.0%
   2     New Jersey           45.7                         42      Oklahoma                              28.8
   3     MARYLAND             45.4                         43      North Dakota                          28.5
   4     New York              44.4                        44      Indiana                               28.2

   5     California            44.0                        45      Louisiana                             26.8
   6     Colorado              43.1                        46      Mississippi                           26.5
   7     Virginia              42.5                        47      Iowa                                  26.4
   8     Rhode Island          42.3                        48      South Dakota                          25.3
   9     Florida               42.1                        49      Alaska                                23.0
   10    Pennsylvania          41.3                        50      Wyoming                               17.7
                                                                         * Information, professional, scientific, business,
                                U.S. Average = 38.3%                       real estate, health care and education services

                             Source: U.S. Bureau of Economic Analysis                                                         12
                       Change From January 2000

       Relative Change in U.S. Employment
            by Educational Attainment
30%
         Bachelor’s degree or higher                                   Recession	
  
25%
         Some college or Associate degree                                              25.1%
20%      High School grad or less

15%
           R
           E
           C
10%        E


                                                                                       6.8%
           S
           S
 5%        I
           O
           N	
  

 0%


-5%


-10%
                    Persons 25 years of age or older                                   -9.3%
-15%
       00 01 02 03 04 05 06 07 08 09 10 11
                             Source: U.S. Bureau of Labor Statistics                       13
   Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure              Workforce Education Index—2010
Why it Matters       An educated workforce is critical to increasing productivity, fostering
                     innovation and encouraging economic growth and investment

              Top 10 States                                                   Bottom 10 States
   Rank                               Score                    Rank                                           Score

    1     Massachusetts               51.5                       41      Texas                                 29.9
    2     MARYLAND                   48.9                        42      South Carolina                        29.3
    3     Colorado                    48.4                       43      Nevada                                29.2
    4     Connecticut                 48.3                       44      Tennessee                             27.5
    5     Vermont                     46.0                       45      Alabama                               26.8
    6     New Hampshire               45.6                       46      Kentucky                              24.7
    7     Virginia                    44.8                       47      Louisiana                             23.6
    8     Minnesota                   44.6                       48      Arkansas                              23.0
    9     Washington                  44.5                       49      Mississippi                           22.7
   10     New Jersey                  44.4                       50      West Virginia                         20.3
                                                                             A weighted measure of the educational attainment
                                        U.S. Average = 36.3                  (advanced degrees, bachelor’s degrees, associate’s
                                                                             degrees, or some college coursework) of the workforce

                            Source: Kauffman Foundation, State New Economy Index--2010                                         14
  Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure           Real Per Capita Personal Income—2011
                  (twelve months ending in June 2011)

Why it Matters   Higher incomes foster increased consumer spending, savings and
                 investment, enable greater entrepreneurial risk taking
            Top 10 States                                                     Bottom 10 States
  Rank                             Average                     Rank                                Average

   1     Connecticut             $56,376                        41      Indiana                   $34,997
   2     Massachusetts            52,603                        42      Alabama                    34,280
   3     New Jersey               52,198                        43      New Mexico                 34,204
   4
   4     MARYLAND
         MARYLAND                 50,313
                                  50,313                        44      Arkansas                   33,486
   5     New York                  49,565                       45      Utah                       33,410
   6     Wyoming                   46,306                       46      South Carolina             33,278
   7     North Dakota              45,596                       47      Kentucky                   33,146
   8     Virginia                  45,376                       48      Idaho                      32,979
   9     Alaska                    45,150                       49      West Virginia              32,716
   10    New Hampshire             44,591                       50      Mississippi                31,707
                                        U.S. Average = $41,062
                   Sources: U.S. Bureau of Economic Analysis, Census Bureau, M&T Bank estimates              15
                                  Other “Leading” Indicators
                                                                                           2010 Rank                   Top State
   Entrepreneurship
        High tech firms as a share of private firms                                               3                    Virginia
       Inc. 5000 firms as a share of private firms                                                3                    Virginia


   Workforce Quality
       Concentration of Scientists & Engineers                                                    3                    Virginia
       Migration of U.S. Knowledge Workers                                                        5                    Massachusetts
       K-12 Student Preparation for Science & Math Careers                                        7                    Massachusetts


   Infrastructure / Investment
       Broadband Telecommunications Bandwidth                                                    2                     New Jersey
       Contribution to GDP from R&D Spending                                                     3                     New Mexico


   Access to Capital
       Venture Capital Investment Per
        $1,000 of Gross State Product                                                            5                     Massachusetts

Sources: TechAmerica.org, Inc. magazine, Kauffman Foundation, American Physical Society, U.S. Bureau of Economic Analysis, PriceWaterhouseCoopers 16
                                          Economic Growth Priority: Quality of Life


                      Gallup “Life Evaluation” Index—2010
                                                                             Overall      Regional
                                                                              Rank         Rank                       Score

                                                                                 4
                                                                                 3           1 MARYLAND
                                                                                             1 MARYLAND               51.5
                                                                                                                      54.3
                                                                                 8           2       Georgia          51.8
                                                                                10           3       Connecticut      51.5
                                                                                11           4       Massachusetts    51.4
                                                                                15           5       Virginia         50.5
                                                                                21           6       New York         49.2
                                                                                24           7       South Carolina   48.6
                                                  Higher Range                  27           8       New Jersey       47.7
                                                  Mid-Range                     29           9       New Hampshire 47.4
                                                  Lower Range
Based	
  on	
  self-­‐evaluation	
  
 of	
  present	
  life	
  situation	
  
                                                                                31          10       Pennsylvania     47.3
and	
  anticipated	
  situation	
  
   five	
  years	
  from	
  now	
                                                             U.S. Average = 49.8
                                                    Source: Gallup-Healthways data—2011                                       17
                                Metrics That Matter
    “Where	
  We	
  Lead”                                                         “How	
  We	
  Lag”	
  
Economic	
  Performance	
                  Business	
  Cost	
  Competitiveness	
  
Workforce	
  Quality	
                     	
  	
  	
  	
  	
  Labor	
  Costs	
  
                                           	
  	
  	
  	
  	
  	
  Tax	
  Burden	
  
Innovation	
  &	
  Productivity	
  
                                           	
  	
  	
  	
  	
  	
  Commercial	
  Energy	
  Costs	
  
Access	
  to	
  Capital	
  
                                           Liability	
  /	
  Regulatory	
  
Global	
  Focus	
                          	
  	
  	
  Environment	
  
Fiscal	
  Stability	
                      Infrastructure	
  Performance	
  
Quality	
  of	
  Life	
  	
  
                                           State	
  Pension	
  Funding	
  Gap	
  



                                                                                                           18
   Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure           Economy.com State Business Costs—2011
                           (Based on unit labor costs, energy costs, state/local taxes, office
rents)




                                                                                   Maryland
                                                                        3%
                                                                        below
                                                                                   12% Above
                                                                                    U.S. Average
                                                                                   46th out of 51


                                                                                   78-89
                                                                                   90-100
                                                                                   100-109
                                                                                   110-plus

                                                                            U.S. Average = 100

                                  Source: Moody’s Analytics—June 2011                              19
  Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure            Private Sector Employee Compensation
                   as Percent of Private GDP—2010
Why it Matters     High unit labor costs can be an impediment to business formation
                   and employment growth
             Top 10 States                                                Bottom 10 States
   Rank                        Percent                    Rank                               Percent

    1     Wyoming              33.5%                       41
                                                           41       MARYLAND
                                                                    MARYLAND                 51.9%
                                                                                             51.9%
    2     Alaska               36.4                         42      Maine                    52.0
    3     Delaware             36.7                         43      Wisconsin                52.8
    4     South Dakota         39.1                         44      Ohio                     52.9
    5     Louisiana            41.3                         45      Pennsylvania             53.2
    6     Nevada               44.9                         46      Minnesota                53.2
    7     New Mexico           45.2                         47      Vermont                  53.6
    8     Iowa                 45.2                         48      Missouri                 54.0
    9     Hawaii               45.3                         49      New Hampshire            55.0
   10     North Carolina       45.5                         50      Massachusetts            57.3
                                   U.S. Average = 49.5%
                               Source: U.S. Bureau of Economic Analysis                                20
                    Chamber Priority: Seek a Competitive Tax Structure

Measure             State Business Tax Climate Index—2011
Why it Matters      Uncompetitive tax burdens influence business location, investment
                    and job creation decisions, impacting long-term economic health

              Top 10 States                                               Bottom 10 States
   Rank                            Index                    Rank                             Index

    1     South Dakota             7.43                       41      North Carolina         4.47
    2     Alaska                   7.39                       42      Rhode Island           4.46
    3     Wyoming                  7.30                       43      Minnesota              4.40
    4     Nevada                   6.74                      44
                                                             44      MARYLAND
                                                                     MARYLAND                4.25
                                                                                             4.25
    5     Florida                  6.53                       45      Iowa                   4.20
    6     Montana                  6.39                       46      Ohio                   4.16
    7     New Hampshire            6.18                       47      Connecticut            4.01
    8     Delaware                 6.03                       48      New Jersey             3.96
    9     Utah                     5.80                       49      California             3.78
   10     Indiana                  5.79                       50      New York               3.73

                                Index: U.S. Average = 5.00
                                Source: Tax Foundation—October 26, 2010                              21
                             Chamber Priority: Seek a Competitive Tax Structure

        State & Local Taxes Relative to U.S. Average
                                            Year                Rank            Maryland                        U.S.                     Virginia
Personal Taxes
Per $1,000 of Personal Income               2010                  48               $37.10                    $24.10                      $28.50

Unemployment
Insurance Taxes                             2010                  32                 $9.20                      $8.00                    $3.90
Per $1,000 of Payroll


Corporate
Income Taxes                                2009                  25                 $2.63                      $2.89                    $1.55
Per $1,000 of Gross State Product



Sales & Use
Tax Rate                                    2011                  14                6.00%                      9.63%                     5.00%

Property Taxes on
Owner-Occupied
Housing as Percent
of Home Value                               2010                  27                 0.94%                   1.08%                       0.80%
          Sources: U.S. Census Bureau, Bureau of Economic Analysis, Department of Labor, Tax Foundation, Vertex Inc., M&T calculations           22
 Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure             Commercial Energy Cost per Btu—2009
Why it Matters      High utility costs increase operating expenses and inhibit business
                    formation and employment growth, particularly for larger firms

            Top 10 States                                                     Bottom 11 States
  Rank                    Per Trilions of Btu                 Rank                        Per Trillions of Btu

   1     Utah                   $13.62                          40
                                                                39      MARYLAND
                                                                        MARYLAND                 $24.06
   2     Iowa                     13.68
                                                                41      Alabama                   24.92
   3     North Dakota             14.17                         42      Vermont                   24.96
   4     Nebraska                 14.40                         43      Delaware                  25.19
   5     Minnesota                14.47                         44      Massachusetts             25.19
   6     Idaho                    14.89                         45      Rhode Island              25.51
                                                                46      New Hampshire             26.07
   7     South Dakota             15.04
                                                                47      California                26.54
   8     Montana                  15.33
                                                                48      Florida                   27.65
   9     Colorado                 15.35                         49      Connecticut               28.48
  10     Wyoming                  15.70                         50      Hawaii                    44.30
                                      U.S. Average = $20.69
                        Source: U.S. Energy Information Administration—June 2011                                 23
 Chamber Priority: Create a Competitive Business Climate and Encourage Job Growth

Measure             Number of Health Insurance Mandates
Why it Matters      High mandate levels drive up insurance costs, inhibiting business
                    formation and employment growth, particularly for smaller firms

            Top 10 States                                                         Bottom 10 States
  Rank                               Mandates                      Rank                                         Mandates

   1     Idaho                          13                          41      California                            56
   2     Alabama                        21                          42t     Virginia                              57
   3     Utah                           23                          42t     Pennsylvania                          57
   4     Hawaii                         24                          42t     New Mexico                            57
   5     Michigan                       25                          42t     Washington                            57
   6     Iowa                           26                          46      Connecticut                           59
   7     Delaware                       28                          47      Texas                                 60
   8     Mississippi                    29                          48      Minnesota                             64
   9     Ohio                           29
                                                                    49      MARYLAND                              67
  10     South Carolina                 29
                                                                    50      Rhode Island                          69
                                            U.S. Average = 43
             Source: Small Business & Entrepreneurship Council, “Small Business Survival Index”—December 2010              24
                 Chamber Priority: Protect & Fund the State’s Transportation System

  Measure                          State Highway Performance and
                                   Cost-Effectiveness—2008
                                                                               2008 Rank

Total	
  Disbursements                     	
             	
             	
  	
  	
  	
  	
  	
  	
  	
  44	
  

Capital	
  &	
  Bridge	
  Disbursements 	
                               	
  	
  	
  	
  	
  	
  	
  	
  47	
     Cost-Effectiveness Rank
                                                                                                                  	
  
Maintenance	
  Disbursements                              	
             	
  	
  	
  	
  	
  	
  	
  	
  45	
     Overall	
  rank	
  in	
  2008	
  	
  	
  	
  	
  	
  	
  43

                                                                                                                  Overall	
  rank	
  in	
  2007	
  	
  	
  	
  	
  	
  	
  	
  	
  41
Administrative	
  Disbursements                           	
             	
  	
  	
  	
  	
  	
  	
  	
  33	
  
                                                                                                                  Overall	
  rank	
  in	
  2006	
  	
  	
  	
  	
  	
  	
  	
  37
Urban	
  Interstate	
  Condition                          	
             	
  	
  	
  	
  	
  	
  	
  	
  39	
  
                                                                                                                  Overall	
  rank	
  in	
  2005	
  	
  	
  	
  	
  	
  	
  	
  38
Urban	
  Interstate	
  Congestion                         	
             	
  	
  	
  	
  	
  	
  	
  	
  48	
     Overall	
  rank	
  in	
  2000	
  	
  	
  	
  	
  	
  	
  	
  34

Deficient	
  or	
  Functionally	
  Obsolete	
  Bridges	
  	
  	
  	
  	
  	
  	
  31	
  

Fatality	
  Rates           	
             	
             	
             	
  	
  	
  	
  	
  	
  	
  	
  18	
  

                Source: Reason Foundation—19th Annual Report on the Performance of State Highway Systems—September 2010                                                                 25
     Chamber Priority: Protect & Fund the State’s Transportation System

Measure Combined Federal, State & Local Gasoline
         Tax Per Gallon—July 2011


                                                                       $0.569   MD with $0.15 hike




                                                                  $0.489   U.S. Average



                                                   $0.419          Maryland (29      th)




                                               $0.384 Virginia (37th)




                           Source: American Petroleum Institute                                      26
 Too Important To Fail?
                                About 84% of Maryland’s state
                                roadways are at least 30 years old

                                25% were built prior to 1930

                                38% of the non-interstate and 72%
                                of the interstate network in Maryland
                                were built between 1950 and 1975

                                Washington is the most congested
                                metropolitan area in the country and
                                Baltimore ranks 5th

                                Washington ranks third in mass
                                transit system usage per capita and
                                Baltimore ranks 11th
Source: American Society of Civil Engineers, Maryland Section—February 2011   27
                              Other “Lagging” Indicators
                                                                                         2010 Rank                     2008 Rank
     Infrastructure
         Percent of Bridges Deficient or Obsolete                                              32                            30
         Mean Travel Time to Work                                                              50                            49

     Business Costs
          Top Marginal Corporate Tax Rate                                       32                            32
          State Liability System Survey                                                        20                            30

     Cost of Living
          Relative Cost of Living                                                              44                            45
          Net Domestic Migration Rate                                                          26                            44

     Financial Stability
     	
  	
  	
  	
  	
  Unfunded Share of State Pension Obligation                            40 (2009)                      n.a.


Sources: U.S. Energy Information Administration, Federal Highway Administration, Census Bureau, ALEC-Laffer, C2ER, Moody’s Analytics, CNBC.com 28
                      Constructing a
           “State Business Attractiveness Index”



Lead                                                   ators	
  
    ing	
  In
             dicat                           g	
  Indic
                   ors	
               Laggin

Leading	
  Indicators	
                  Lagging	
  In
                                                      dicators	
  




                                                                   29
                                                                                             Index Components
                          Indicator	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Period	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Source	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  Index	
  Weight	
  
        Growth	
  in	
  Private	
  Establishments	
  	
                                                                                                                                            2008-10                                                       Bureau of Economic Analysis                                                                                                                             10.0%	
  
L	
     Human	
  Capital	
  Investment	
  Index	
                                                                                                                                                  2010                                                          Milken Institute                                                                                                                                        10.0%	
  
E	
     High	
  Tech	
  Share	
  of	
  Private	
  Payrolls	
                                                                                                                                       2010                                                          Bureau of Labor Statistics                                                                                                                              	
  	
  7.5%	
  
A	
     R&D	
  Share	
  of	
  Gross	
  State	
  Product	
                                                                                                                                          2007                                                          National Science Board                                                                                                                                  	
  	
  5.0%	
  
D	
     Venture	
  Capital	
  Investment	
                                                                                                                                                         2010                                                          PriceWaterhouseCoopers/BEA                                                                                                                              	
  	
  5.0%	
                                                  50%	
  
I	
     Per	
  Capita	
  Personal	
  Income	
                                                                                                                                                      2010                                                          Bureau of Economic Analysis                                                                                                                             	
  	
  5.0%	
  
N	
     State/Local	
  Debt	
  as	
  %	
  of	
  Personal	
  Inc.	
                                                                                                                                 2008                                                          Census Bureau                                                                                                                                           	
  	
  2.5%	
  
G	
     Ten-­‐Year	
  Avg.	
  Unemployment	
  Rate	
                                                                                                                                               2001-11                                                       Bureau of Labor Statistics                                                                                                                              	
  	
  2.5%	
  
        Recently	
  Enacted	
  Tax	
  Changes	
                                                                                                                                                    2009-10                                                       ALEC-Laffer/BEA                                                                                                                                         	
  	
  2.5%	
  
        	
  
        Employee	
  Compensation	
  Costs	
                                                                                                                                                        2010                                                          Bureau of Economic Analysis                                                                                                                             10.0%	
  
L	
     State	
  &	
  Local	
  Tax	
  Burden	
                                                                                                                                                     2009                                                          Tax Foundation                                                                                                                                          10.0%	
  
A	
     Comparative	
  Cost	
  of	
  Living                                                                                                                                                        2011                                                          C2ER (formerly ACCRA)                                                                                                                                   	
  	
  7.5%	
  
G	
     Commercial	
  Energy	
  Costs	
  Per	
  Btu	
  	
  	
  	
                                                                                                                                  2009                                                          Energy Information Admin.                                                                                                                               	
  	
  5.0%	
  
G	
     State	
  Liability	
  System	
  Rating	
                                                                                                                                                   2010                                                          Institute for Legal Reform                                                                                                                              	
  	
  5.0%	
                                                  50%	
  
I	
     State	
  Transportation	
  Spending	
                                                                                                                                                      2008                                                          Census Bureau/BEA                                                                                                                                       	
  	
  5.0%	
  
N	
     State	
  Heath	
  Care	
  Mandates	
                                                                                                                                                       2010                                                          Small Business Survival Index                                                                                                                           	
  	
  2.5%	
  
G	
     Unfunded	
  State	
  Pension	
  Liability	
                                                                                                                                                2009                                                          Pew Center For the States                                                                                                                               	
  	
  2.5%	
  
        State	
  Export	
  Growth	
                                                                                                                                                                2008-10                                                       Department of Commerce                                                                                                                                  	
  	
  2.5%	
  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             30
“State Business Attractiveness Index—2011”
                                               Overall     Regional                   Pct. Above / Below
                                                Rank        Rank                      U.S. Average Score

                                                   5            1       Massachusetts         23.6%
                                                   6            2       Virginia              23.0
                                                 11
                                                 14            3
                                                               3        MARYLAND              16.5
                                                  15            4       Delaware               9.6
                                                  22            5       New Hampshire          3.4
                                                  24            6       Indiana                3.2
                                                  27            7       Pennsylvania          (0.7)

                 10%+ Above U.S.
                                                  28            8       New York              (1.6)
                 0-9% Above U.S.                  33            9       Tennessee             (4.3)
                 Below U.S. Avg.                                        North Carolina        (6.7)
                                                 35           10


                                                       Top State:        Washington      36.7%
            Source: M&T Bank calculations based on 18 input variables                                  31
“It	
  is	
  not	
  the	
  strongest	
  of	
  the	
  species	
  
that	
  survive,	
  nor	
  the	
  most	
  intelligent,	
  
        but	
  the	
  ones	
  most	
  responsive	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
                       to	
  change.”	
  
                           —	
  Charles	
  Darwin	
  




                                       Hyatt Regency Chesapeake Bay Resort                          32
  Maryland’s Competitiveness:
Where We Lead, How We Lag
              Gary D. Keith
      Regional Economist – M&T Bank
            November 2, 2011



              Hyatt Regency Chesapeake Bay Resort
               No Shortage of Opinions…
January 2011      April 2011     May 2011        June 2011




 June 2011        June 2011    September 2011   October 2011




                                                               35

				
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