Assembly panel reviews efforts to attract businesses to state

July 13, 1995|By Marina Sarris | Marina Sarris,Sun Staff Writer

Tired of losing businesses to other states, Maryland's top legislative leaders said yesterday they want to strengthen the state's arsenal of economic development weapons.

The General Assembly's presiding officers said they are forming a task force to review the financial incentives Maryland uses to lure companies here, with an eye toward increasing those offerings.

The 18-member panel, made up of legislators, will investigate the possibility of providing corporate and personal income tax credits to new businesses and their employees, among other ideas, said House Speaker Casper R. Taylor Jr.

The group is to report back before next year's legislative session, when its proposals could be passed into law.

"Our sister states are using tools that Maryland doesn't have, not just to attract business but to lure Maryland businesses across our border," said Senate President Thomas V. Mike Miller Jr. "Our good people in economic development are endeavoring to compete with their hands tied behind their back."

While lauding the goal of economic development, another prominent legislator suggested the state may be going too far in some cases to lure businesses here.

House Appropriations Committee Chairman Howard P. Rawlings noted that the governor announced this week he would work toward securing a new highway interchange for a company that is bringing 20 jobs to Hagerstown.

But the interchange is not on the state's five-year transportation plan, he said, and may end up bumping another project off the list.

"My concern would be related to the cost of such an interchange related to the economic benefit to the state," said Mr. Rawlings, a Baltimore Democrat. "Moving here with 20 jobs is not going to create any excitement, even in Western Maryland."

He added, however, that the state will need to build roads to attract some businesses and said it should consider raising gasoline taxes to pay for them.

State officials said plans for the interchange at Interstate 70 and Route 632 are so sketchy they do not have an estimate of its cost. Interchanges generally run from several million dollars to $15 million.

Gov. Parris N. Glendening defended the interchange sought by Allegheny Power System Inc., saying it would take at least three years to get federal approval. And if approved, he said, the federal government would pay 80 percent to 90 percent of the cost.

He also praised legislative leaders for creating the task force. "We must do everything possible to make Maryland competitive in terms of business and economic development," he said.

The state's efforts to lure private sector jobs have become more urgent this summer in the wake of federal proposals to close NASA's Goddard Space Flight Center and military bases in Maryland, Mr. Glendening said.

Mr. Taylor said he is concerned that Maryland cannot compete with Virginia. "The evidence seems to indicate that Virginia outbids us on a lot of economic development projects because they have more tools than we do."

Last month, Virginia nosed out Maryland to win a 20-state competition for a solar panel manufacturing plant by offering subsidies.

Mr. Miller said the task force also must consider the effect new economic development programs will have on the state budget and other priorities, such as education and public safety.

"We want to make sure we're not participating in some corporate welfare program, to the detriment of our taxpaying citizens. It's a delicate balancing that must be done," Mr. Miller said.

Several states have spent millions and millions in an escalating war to attract businesses -- and sometimes wondered later if it was worth the expense. Two years ago, for example, Alabama offered more than $300 million -- including $45 million to pay the first-year salaries of 1,500 workers -- to win a battle for a Mercedes plant.

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