MD study finds payoffs for economic development spending
Economic development activities can deliver broad value to communities, driving business growth, attracting investment and creating a foundation for prosperity, a point reinforced by the results of a statewide study.
According to the study, which was released in January, every dollar invested in local economic development operations over the previous three fiscal years generated an estimated average of $8.81 in state and local tax revenue. That is a slight decrease from the $9.17 return on investment noted in the 2024 report.
The 2025 report’s results, which were released by the Maryland Economic Development Association, or MEDA, were developed using data from county economic development offices, with 75% of the offices responding. The results help local and state economic development officials understand the impact of activities that include site planning, K-12 education and workforce improvements, among others.
Richard Griffin, CEcD, outgoing president of MEDA, and John Hickman, director of BEACON, the Salisbury University group that conducted the study, said that $8.81 is a more reliable number than $9.17. They said the small drop likely is due to the collection and analysis of more and stronger data across a wider geographic area.
Gathering and analyzing the data
BEACON, or the Business Economic & Community Outreach Network, analyzed the data using economic impact modeling software. Part of Salisbury University’s Franklin P. Perdue School of Business, BEACON has provided applied business and economic research and outreach programs to businesses, government agencies and nonprofits for more than 35 years.
The involvement of BEACON helps “ensure that it’s not just economic development professionals saying, ‘Hey, we’re doing a great job,’ ” Griffin said. “A qualified third-party university organization analyzes the data and concurs that this is a good investment for the state of Maryland.”
For the 2025 study, BEACON staff and Salisbury students explored data from fiscal years 2022, 2023 and 2024, examining job creation and retention figures reported by county economic development departments, as well as the funding that each county invested in support of those operations.
“We try to bring the expertise that resides here at Salisbury University to the needs of the business, governmental or nonprofit industries,” said Hickman, who added that the work allows organizations to see the value of economic development and the impact it has at the state and county levels.
Also important, Hickman said, is the project’s impact on students, who are able to apply what they learn to a real-world situation and build their skills.
When these students go on to interview for jobs, they are able to demonstrate that they have the skills employers need, including the ability to interact with C-suite executives, analyze data, complete preliminary research and assist with report creation, Hickman said.
Value proposition
The study results show the value of investments made in towns and cities across Maryland.
“When the governor and state legislators evaluate economic development programs, tax credits and a wide variety of other programs that help economic developers retain, expand and attract employers into the state of Maryland, MEDA believes it is helpful for them to understand the value proposition of that investment when making the decision to invest in things that help retain employers that create jobs and tax bases in communities,” Griffin said.
The data are important for local officials who oversee economic and development departments and programs and can help them clarify whether it makes sense to invest in the profession of economic development, Griffin said.
“Economic development is circular,” Griffin said. “You have business climate and growth, jobs, tax base and community investment. That community investment then leverages a better business climate, which encourages business growth and good jobs and tax base and community investment.”
Continued Griffin: “Understanding that and having a robust economic development and workforce development effort going on in your community and across the state provides resources to local governments and state governments to reinvest in the state. This improves the business climate and continues that circle for our community. It’s a constant set of returns and reinvestment that drives those ultimate benefits in terms of jobs and tax base.”
Gov. Wes Moore and his administration have made economic development a high priority, recently appointing a new secretary of commerce, Harry Coker Jr. Griffin believes the results of the study represent another step toward working collaboratively with the state to attract and retain employers.
Researchers are to begin gathering data for the 2026 study in the fall.
