Safety, less taxes stressed

January 05, 1995|By John E. Woodruff | John E. Woodruff,Sun Staff Writer

Sports teams and symphonies may make life more pleasant for Maryland's executives, but safe streets and good schools are much more important to the state's business climate, a Baltimore executive told state legislators yesterday.

Maryland has long seemed to be in "confusion over the relative importance of various kinds of amenities," said A. B. "Buzzy" Krongard, chief executive officer of Alex. Brown & Sons Inc.

Recreation and the arts "are all important, but they pale in comparison with tax rates, quality education and public safety" as factors in business location decisions, he said.

Maryland's government should cut back its ambitions and its budgets and "concentrate on doing a very few things very well -- schools, police, excellent performance by public regulatory agencies," Mr. Krongard advised.

Mr. Krongard, two other senior business executives and a Loyola College economist hammered away at deficiencies in the state's "business climate" for five hours before a few dozen senators, delegates and legislative staff members who attended a symposium sponsored by Maryland Business for Responsive Government, a business-advocacy group, and its affiliate, the Council on Economic Education in Maryland. Stephen A. Fragapane of PHH Relocation and Real Estate Services says Maryland has handicapped itself with such an anti-business reputation that it "cannot keep pace with Virginia and the Carolinas" in economic growth.

"A nonresponsive business climate, a weak and ineffective economic development effort and a poor image -- all fixable issues that a new legislature and governor can address," are responsible for the state's inability to breed private-sector jobs, said Mr. Fragapane, senior vice president at the Hunt Valley-based national business consulting firm.

Mr. Krongard says Maryland "either is perceived as anti-business, or else in reality it is anti-business, and in either case, the effect is about the same."

"The perception is the most important reality," Mr. Krongard said.

MBRG and other organizations in Maryland's business community, having reorganized themselves at the end of 1994, are gearing up to press the new governor and new General Assembly to make big changes in a state business climate that many senior executives believe has become a drag on economic growth.

Thomas DiLorenzo, a Loyola College economics professor, and Francis P. Lucier, former chairman of Black & Decker Corp., emphasized tax issues, arguing that the state must shed its high-tax reputation before it can hope to become attractive to businesses.

Mr. Fragapane cited the relocation of United Parcel Service's headquarters from Connecticut, in which he participated, as a prime example of Maryland's shortcomings in attracting business.

Baltimore made UPS' short list of possible sites, along with Dallas and Atlanta, but "it was Atlanta that won out, because Atlanta's business community and economic development authorities really do know how to show their city off, to convince a business that they understand its needs and they have the place to be," he said.

Maryland needs to, "first, decide what are your target businesses, and from that you can decide what tax structure and public programs will hold, encourage and attract" economic growth, he said.

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