August 13, 1995|By BARRY RASCOVAR
The dichotomy is stunning, and alarming. This week, Maryland officials proudly announced that a California printing company would move its corporate headquarters to Baltimore. Some 25 employees -- executives and support staff -- will work downtown.
Also this week, Virginia officials announced construction of a $1.2 billion computer chip plant in Manassas, employing 1,200 people.
Twenty-five jobs for Maryland; 1,200 jobs for Virginia.
What's happening south of the Potomac is deeply disturbing. Jobs are flowing to the Old Dominion (and to Pennsylvania to a lesser degree) but not to Maryland. In just the past four months, Virginia has captured two chip-making plants (IBM-Toshiba and Motorola) that will cost $4.2 billion to build and eventually mean -- 22,000 new spin-off jobs.
Maryland, meanwhile, is valiantly struggling to keep in-state companies from leaving and signing up smaller-scale businesses. All the money spent so far this year in "sunny day" funds to entice businesses to Maryland won't even create as many jobs as the one IBM-Toshiba chip factory in Manassas, Va.
Virginia is certainly doing what it takes to bring in new jobs and spur economic vitality. It has had a string of pro-business governors, with incumbent Gov. George Allen being the most energetic deal-maker. It has a supportive General Assembly. It has a business community that actively boosts Virginia.
The state boasts of low taxes, minimal red tape, a right-to-work law and a government that wants to help, not hinder. Virginia has identified its assets and markets them.
Maryland lags far behind. Yes, it has had aggressive governors. One thing about William Donald Schaefer was that he was forceful in pushing job growth; Gov. Parris Glendening's centerpiece has been economic development, too.
But Maryland lacks a supportive legislature. Large segments of the General Assembly are hostile to business. Organized labor remains strong -- thus, the notion of a right-to-work law remains a pipe dream. Legislative leaders insist on micromanaging economic development issues and critiquing every move. Republicans, while condemning the loss of jobs under the Democrats, rail against incentive packages ("corporate welfare") for companies.
Twice economic development chief James Brady has taken business-development packages to the Legislative Policy Committee for approval. Twice he has been raked over the coals.
It's as though lawmakers don't want to spend any of the $20 million "sunny day" fund. Meanwhile, Virginia sealed the IBM-Toshiba and Motorola deals with total incentive packages of nearly a quarter-billion dollars.
Such big-time gambles would be laughed out of the General Assembly. Heck, lawmakers adamantly refused to give Mr. Schaefer more than a $5 million economic incentive fund, then grudgingly gave Mr. Glendening $20 million.
In contrast, Virginia is spending 12 times that amount on IBM and Motorola. No wonder Maryland wasn't even under consideration for the computer chip plants.
Compounding the problem is a bureaucratic climate in Annapolis and county seats that often strangles and frustrates businesses. The culture is hostile to corporations.
Then there's the split among business groups, which jockey for the right to complain the loudest about Annapolis' anti-business posture. This only adds to the negative climate.
Steps can be taken, though, to improve Maryland's standing. A cut in the personal income tax seems inevitable in the next few years. This would help, if done correctly.
However, administration leaders are discussing a small cut -- perhaps 4 percent. And they are not looking at reducing the tax rate but at increasing personal exemptions. That would be a foolish mistake. Maryland's tax burden for high wage earners (typically they make relocation decisions) wouldn't change.
A second worthwhile step would be to get serious about big-league job incentives. Some business officials are urging a $100 million or $200 million corporate incentive fund. This, at least, would put Maryland back in competition with its neighbors. But short-sighted legislators are sure to object.
Perhaps the best immediate step would be to focus on making Maryland's regulatory climate business-friendly. Corporate leaders say regulatory issues rank as the No. 1 headache, be it obtaining a permit, meeting strict environmental standards or just jumping through needless bureaucratic hoops.
Some reforms the governor can take unilaterally. But getting legislators to drop their distrust of business won't be easy.
This is no small matter. Jobs going to Virginia instead of Maryland mean more prosperity there and less here. It's that simple. Virginia understands this point. When will Maryland catch on?
Barry Rascovar is editorial-page director of The Sun.
