Md. garners straight A's in economic development

April 24, 1991|By David Conn

Maryland earned a gold star, went to the head of the class, made the dean's list and graduated with honors yesterday.

Those are the results -- minus a small glitch here and there -- of the latest Development Report Card for the States, published by the Washington-based Corporation for Enterprise Development, a business-oriented think tank: Maryland and Connecticut were the only states to score straight A's in four development categories, despite the two states' multimillion dollar budget problems. Maryland became the only state to be in the "four-A club" three years in a row.

The four categories are:

* Economic performance, including employment, job quality and income disparities between rural and urban citizens and between the rich and poor.

* Business vitality, meaning the competitiveness of existing businesses, the state's entrepreneurial energy and the economy's structural diversity.

* Development capacity, which covers human resources, technology resources, and financial, infrastructure and amenity resources.

* State policy, including tax and fiscal policies, job development, technology and innovation, financingprograms, physical infrastructure and amenities, and international marketing.

"Maryland once again is the leading state in economic development. However, we cannot take our successes for granted," Gov. William Donald Schaefer said of the CFED report card, now in its fifth year.

"We must seriously examine funding levels and our continued commitment to the economic development programs and policies that have made Maryland a national leader," Mr. Schaefer said in a statement.

Aside from Maryland and Connecticut, three other states scored B's or better, according to CFED: Minnesota, New Jersey and Pennsylvania. Louisiana, Montana and West Virginia trailed the pack, with D's or F's in every category.

Despite Maryland's strengths in the four broad categories, the state showed some weaknesses, according to the non-profit CFED. Most notable was a glaring F in the governance subcategory of the state policy index.

One of seven subcategories, governance includes Maryland's tax and fiscal policies, the nature of recent regulatory reforms and the development of an economic strategic plan.

Mr. Schaefer blamed the 1991 General Assembly for the state's shortfalls. "The proposals put forward this year -- and defeated by the legislature -- to reform Maryland's tax structure and manage future growth would have addressed this area of concern," he said, referring to his controversial Linowes tax reform and "2020" growth management plans.

"We must not be afraid to confront these issues and bring about the changes necessary to make our tax system fairer and protect our excellent quality of life in the future," he added, putting in an early plug for passage next year of the two bills.

But Mitchell Horowitz, the director of the CFED study, said the governor was only "partially right."

Although "our overall impression of Maryland's policy efforts is outstanding," he said, the state's tax and fiscal policies leave "some local governments [with] more fiscal ca

pacities to provide services than others. And state government has to address that."

In a separate study with the Baltimore Regional Council of Governments, Mr. Horowitz said, his group found that "Baltimore had some of the sharpest disparities between how the city was doing vs. the suburbs."

It's true that some of the Linowes reforms are targeted toward the tax and fiscal inequities CFED found, Mr. Horowitz said. But equally important is Maryland officials' failure to develop "a much more clearly articulated vision of what their investment policies are about," he said.

The state has thrived without such a long-term vision because of the largess of federal government contracting, among other things, according to Mr. Horowitz. But that's not an economic engine Maryland can continue to rely on, he said.

Further, the state must be able to determine if its goals are being met. "Just how good are their programs doing?" Mr. Horowitz asked. "You really need to have performance measures."

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