Incentives to Lure Businesses

July 16, 1995

Maryland, says the Senate president, can't compete for jobs with other states because our economic development officials "are endeavoring to compete with their hands tied behind their ++ back."

Good analogy. When it comes to big job announcements, Maryland is in the minor leagues. Virginia, South Carolina, Alabama, North Carolina, even Pennsylvania win the large plants.

But is there an easy answer to Maryland's lackluster showing? That's what an 18-member legislative panel will try to discover. Senate President Thomas V. Mike Miller and House Speaker Casper R. Taylor want to find out what tools Maryland's officials ought to have that they now lack.

Especially aggravating to Mr. Taylor was the loss of Solarex Corp.'s manufacturing plant to Virginia. By offering targeted tax credits linked to job-development, Virginia won the race for a $20 million plant producing solar panels -- though Solarex' headquarters is in Frederick. There was no way Maryland officials could compete with that offer.

Removing such impediments would prove quite helpful to James Brady, the state's new economic development chief. A top-level legislative study should also sensitize lawmakers to the need for a far more pro-business attitude in the General Assembly. The legislature must become a true partner in the hunt for new businesses.

Yet how far should this state go? South Carolina spent $120 million to win a 2,000-worker auto plant. Alabama spent $300 million for its auto plant -- including $45 million to pay the first year salaries of 1,500 workers. It is doubtful local taxpayers would applaud such lavish spending.

Still, Maryland cannot stand on the sidelines, as some conservative purists would like, and denounce "corporate welfare." Sensible incentives are legitimate economic development tools. With the pending closing of Fort Ritchie, the threatened shutdown of Goddard Space Flight Center and other federal job cutbacks, the state must work harder to encourage private-sector job growth.

Targeted tax credits could be an ideal vehicle. Gov. Parris Glendening has long championed such narrowly focused credits. larger "sunny day fund" might be required, but with strict oversight on how the governor spends this money. A second "sunny day loan fund" might make sense, too.

It will take more than money, though. A skilled work force is required. So are quality public school systems and universities of the top rank. Constantly improving transportation networks are pivotal. And perhaps the missing ingredient -- an energized and well coordinated drive by the governor, legislature and business leaders to vastly improve Maryland's image in the corporate world.

This legislative task force could provide a useful impetus for generating such a cooperative spirit. Mr. Glendening already has signaled his eagerness to make Maryland a player in the search for jobs. Now it is the legislature's turn to display its commitment to economic development, too.

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