The Maryland General Assembly will consider scores of bills during the 2017 Legislative Session to address education, jobs and the economy. There has been a lot of talk in Annapolis recently about the importance of STEM and the need to increase school funding to improve our kids’ education and their prospects in the future economy. And everyone recognizes the need to make Maryland more competitive so we can increase jobs and diversify the private sector companies that call Maryland home.
One way for the General Assembly to help accomplish these goals is to pass legislation sponsored by Sen. Nancy King (SB 200) and Del. Jay Walker (HB 240) to increase the value of the Research & Development tax credit.
The R&D tax credit is an effective and proven tool that states have used for decades to encourage companies to conduct valuable research and development activities in technology-intensive industries, such as aerospace and defense, pharmaceuticals and telecommunications.
Innovation is critically important to the ability of companies in these industries to develop new products and improve the capabilities of what they produce. Of equal importance is the impact that innovation has on the ability of companies to create and increase jobs – not just jobs directly related to R&D activities, but jobs created from the products developed from those activities and taken to market.
Maryland has offered the R&D tax credit as an incentive to conduct research and development since 2000. But the R&D credit’s value hasn’t changed much since inception. And other states, like New Jersey, Pennsylvania and Virginia, have enacted new laws to strengthen their R&D credits – wooing technology companies with policies that are more welcoming to business investment and job creation.
King and Walker have introduced legislation recently to attract more R&D investment and encourage more job creation in Maryland’s technology sector. The legislation would more than double the value of Maryland’s R&D tax credit over the next three years to attract more research and development activities and investment in the state.
Over time, the legislation will encourage companies engaged in R&D in Maryland to do more of that work in the state – and it will attract new companies to set up shop in Maryland in the future. This is vitally important if we expect private-sector technology jobs to be available in Maryland for students who have been strongly encouraged in recent years to pursue educations in STEM.
Innovation and job growth in Maryland’s technology sector won’t just happen. And having a highly educated workforce with proximity to good schools, major universities and the federal government isn’t enough. We need meaningful legislation to encourage more R&D investment and private-sector technology jobs in Maryland.
Maryland must take proactive steps to become more competitive. Strengthening the R&D tax credit is a good first step.
Tami Howie is chief executive officer of the Maryland Tech Council.