(The Center Square) – Maryland dropped one spot to 42nd place in the 2025 Rich States, Poor States economic outlook report released Tuesday by the American Legislative Exchange Council.
The annual report ranks states based on 15 forward-looking economic policy measures, including tax rates, labor laws and government spending.
Maryland is one of the few states moving in the opposite direction. It has fallen steadily in the rankings since reaching its highest-ever placement, 20th, in 2012.
According to ALEC, rising debt service costs, an expanding public workforce, and growing tax burdens—especially in the ”remaining tax burden” category—have contributed to Maryland’s long-term decline.
The report also notes that increases to Maryland’s minimum wage have raised the cost of doing business, potentially making goods and services more expensive for consumers.
In the 2025 edition, Maryland ranks 42nd for economic outlook, with some of the nation’s highest personal income tax rates and one of the lowest scores for recent tax policy changes.
The state ranks 42nd for its top marginal personal income tax rate, at 8.25%, 45th for income tax progressivity and 41st for remaining tax burden per $1,000 of income.
Maryland’s debt service consumes 5.2% of tax revenue, one of the highest shares in the country and the state ranks 48th for full-time public employees per 10,000 residents.
The report also ranks Maryland 45th in cumulative domestic migration, with a net loss of more than 266,000 residents between 2014 and 2023.
Maryland also ranks 41st in overall economic performance, a backward-looking measure based on GDP growth, employment and migration data.
From 2013 to 2023, Maryland’s GDP grew by 51.7%, while non-farm employment increased by just 5.1%, placing it near the bottom nationally.
These developments come as Gov. Wes Moore has signed several tax-related bills in recent months.
Some of Maryland’s recent tax changes—such as new high-income tax brackets and a digital services tax— were passed as part of a broader effort to address a projected $3.3 billion budget gap and fund education initiatives like the Blueprint for Maryland’s Future.
