State criticized for marketing mail-order items Entrepreneur says her business will be harmed

November 27, 1992|By Marina Sarris | Marina Sarris,Staff Writer

Melissa M. Fulton, businesswoman and taxpayer, is furious.

Ms. Fulton recently discovered the tracks of an "unfair" competitor to her mail order and retail business, Celebrate Maryland!, which sells Maryland-oriented memorabilia, sweat shirts, scarfs, books and T-shirts.

Her rival? The state of Maryland itself.

Why, at a time when the state is cutting money for the poor and elderly, she asked, is the Maryland Department of Natural

Resources using public money to get into the T-shirt business?

The department sent out 134,000 fliers and catalogs this month for its new mail-order business selling tote bags, coffee mugs, field guides and just about anything else that can be emblazoned with the words "Maryland" or "Chesapeake Bay."

"Where are they getting the funding?" asked Ms. Fulton, whose shops are in Ellicott City and in St. Michaels on the Eastern Shore.

"I'm outraged that they're using tax dollars to compete against me," she said. "Next thing you know they'll be selling used cars."

The state sees its venture quite differently. The Department of Natural Resources is just trying to earn money to make up for some of the budget cuts affecting the 54 forests and parks its runs, said agency spokesman Robert L. Gould. Forest and park programs have been cut by roughly $2 million over the past two years.

"The legislature mandated that we try to increase our revenues, and this is an attempt to do that," Mr. Gould said. "This catalog also is a good marketing tool."

He said the state technically did not use tax dollars for the project. Instead, it dipped into a "special fund" -- derived from the sale of souvenirs at 10 parks -- for the roughly $50,000 it needed to start up the mail-order business. The catalog advertises many items already available at park concessions.

Ms. Fulton is unimpressed by the distinction being drawn between special and tax funds.

The real question, she said, is whether citizens want government to use their money to launch businesses.

"Government should be providing social programs, baseline services and building infrastructure," she said.

And retail is too risky a business for bureaucrats who don't have a personal stake in the outcome, in Ms. Fulton's view.

"Did they [state officials] have to go out and put a second mortgage on their home to finance their business? They didn't risk a thing personally. But they're risking our tax dollars in a retail venture that they're ill-equipped to operate," she said.

For its part, the state views its new mail-order business as an extension of the souvenir concessions at parks.

The concessions, many operated by private vendors, yield $200,000 to $250,000 a year in net profits for the department, Mr. Gould said. The money goes back into park operations.

The department sent the catalogs and fliers to people whose names appeared in its own boating records and on a Motor Vehicle Administration list of recreational vehicle owners.

The state paid private businesses for the development and printing of the catalog.

"None of the items in the catalog are copyrighted. Nothing prevents [Ms. Fulton] from doing the same thing," Mr. Gould said.

The prices of the merchandise in the state catalog are "consistent with the market" and have not been set artificially low, he said.

State Del. Howard P. Rawlings, who chairs the House Appropriations Committee, applauded the department's attempt to be more entrepreneurial during the state's budget crisis.

However, if it does not make a profit, the mail-order business should be shut down, the Baltimore Democrat said. "There will be no state subsidies."

Mr. Gould said the department expects the catalogs to bring in more than the $80,000 it needs to break even.

"Sales have been very, very brisk," he added.

Sen. Christopher J. McCabe, whose district includes Ms. Fulton's Ellicott City shop, called the state's endeavor a "kind of misplaced attempt to try to compete with private industry."

"I think the average taxpayer has good cause to be skeptical," the Republican lawmaker said.

The owner of a similar souvenir business sympathized with Ms. Fulton's concerns.

"On the one hand I see the state's in trouble, and on the other hand I don't know if retailers should have to compete with the state," said Frank Hopkins, who owns the "Maryland My Maryland" shop at Baltimore's Harborplace.

Mr. Hopkins said he feels his shop is not directly affected by the state's venture because he does not sell his T-shirts, postcards and regional posters through the mail.

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