Maryland: an Emerging Powerhouse

September 20, 1994|By MARK L. WASSERMAN

ANNAPOLIS — Annapolis.--Let's face it. Economic cycles have little to do with election cycles. The structure of the Maryland economy reflects the influence of decades of factors well beyond our control. A few years ago, we were basking in the growth and prosperity of the 1980s. Defense spending was accelerating. Growth spurred a construction-industry boom. Jobs were plentiful. Our economy was robust and growing faster than the rest of the nation.

During the past four years, Maryland's economy has weathered a national structural recession unmatched since the Great Depression. The end of the Cold War and collapse of the Soviet Union triggered a sudden and ongoing build-down of defense and related industries. Maryland, the fifth most defense-dependent state in the nation, was hit hard. Suddenly, a major economic building block turned into a major vulnerability.

The recession brought other challenges. Besides its severity, its unpredictability tested us. The rapid growth of the 1980s was halted and Maryland's booming construction industry nearly stopped in its tracks. Corporations across the state and country restructured to ensure competitiveness in a global marketplace. The state and national manufacturing base continued to erode.

Maryland has emerged from the recession lean and ready to compete. We can look to the future with confidence for the following reasons:

* The Schaefer administration inherited a $52 million surplus in 1987. Now, there is a surplus of $60 million.

* The Rainy Day Fund contains $162 million. That number was zero in 1987.

* Through the recession, Maryland has retained its triple-A bond rating. Only four other states currently share this distinction.

* Maryland's budget for fiscal-year 1995 is balanced, as always. Our state Constitution mandates a balanced budget. The governor and the General Assembly made tough decisions as they coped with the effects of the recession. Undoubtedly, the next governor and General Assembly will make tough decisions, too. But the budget will be balanced.

* Money magazine has finally relented, lowering Maryland's ranking for tax burden from 48th to 42nd among the states. Comptroller Louis L. Goldstein argues correctly that Maryland would rank 23rd if its tax burden were analyzed fairly.

* Maryland's July unemployment rate was 5.3 percent. Our rate is consistently well below the national rate, 6.2 percent in July.

* Maryland continues to experience a steady stream of expansions and new business locations.

* The Port of Baltimore is headed toward its best year since 1988. Cargo is running 18 percent above last year's levels.

* Over the past decade, exports by Maryland firms have grown at an average rate of 26.5 percent per year, far exceeding the national growth rate.

* BWI Airport passenger activity is growing at an unprecedented rate.

Critics and candidates have suggested that the Schaefer administration has not been operating with a strategic focus. Where were these people while this administration developed its economic development blueprint?

The cornerstones include manufacturing modernization, commercializing technology, targeting promising industries of the future, coping with the challenge of defense downsizing,capturing a large share of investment in mid-Atlantic distribution centers, spurring the globalization of the Maryland economy, enhancing the competitiveness of Maryland's tourism industry, committing Maryland to the development of a system of life-long learning, investing strategically in infrastructure, targeting resources to stimulate the development of distressed communities, and drawing minorities into the entrepreneurial mainstream.

Our budgets have reflected these efforts. Our legislative initiatives have followed suit. With the strong support of the governor and the General Assembly, we have been advancing on every front. One wonders where the hand wringers have been. Or, is it simply that they are seasonal in their orientation?

Public-sector economic development at the state level is a complex enterprise. It is not solely about real-estate development and business attraction. It is not solely about lowering taxes and reducing regulations. To discuss economic development without mentioning such crucial components as worker training, technology development, competitiveness, tourism infrastructure, trade and more ignores the fact that more than 80 percent of new jobs created in Maryland will be produced by resident businesses.

The players involved in trying to shape the future of the Maryland economy cannot simply turn up once every four years, beat their breasts, wring their hands and lapse into silence. Economic development is a full-time, competitive effort requiring committed allies and consistency. Maryland holds the promise of emerging as a 21st-century powerhouse if we band together and take advantage of strengths envied by our competition.

Mark L. Wasserman is secretary of the Maryland Department of Economic and Employment Development.

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