Md. economy vs. environment Debate: It seems possible that the state could come out of the legislature in better shape to compete economically and to more effectively regulate its environment.

On the Bay

January 19, 1996|By Tom Horton | Tom Horton,SUN STAFF

"MARYLAND'S regulatory environment represents one of the state's greatest competitive disadvantages," a state economic development commission has told Gov. Parris N. Glendening.

Among the keys to attracting and keeping jobs, it says, are making sure Maryland regulations seldom exceed federal minimums and making regulators more "customer-friendly," less adversarial.

Such admonitions are nothing new, but these will be debated as never before in the legislature, as the state makes a major push to compete in the leaner, meaner business climate of the 1990s.

At worst, the debate could be another round of special-interest grabs and environment bashing, countered on the environmental side by equally ill-considered, no-compromise defensiveness.

At best, it seems possible the state could emerge better positioned to compete economically and to regulate its environment more effectively.

I say that based on good spade work by business pollsters at the University of Baltimore's Jacob France Center, that shows how environmental protection affects -- and doesn't affect -- Maryland's economy.

The business-sponsored documents include "A Review of Maryland's Regulatory Environment," and quarterly issues of the Maryland Business Climate Survey," which focus on those "mobile" industries that are most likely to move their jobs to or from Maryland.

Of 250 such businesses surveyed, about 37 percent said the state's business climate was fine, while 31 percent said it was poor.

Thirty-three percent named taxes as the most important disadvantage of doing business in Maryland. "Regulations" were cited by 12 percent.

And here the surveys make a useful point, often lost in economic-environment debates: that "regulation" covers a lot of ground, including labor, safety, health, building permits, tax codes.

Of the 12 percent citing regulations as the prime disadvantage, one firm said, specifically, "environmental regulations," while the rest said "general/other regulations."

What is the single most important step to improve Maryland's business climate, the companies were asked.

Of 185 replies, 67 said lower taxes; 20 said less government generally; two said less environmental regulation.

Asked whether state regulations had hindered them in the last year, 69 companies said yes, but of these, only seven cited environmental regulations.

Asked another way -- "to what extent have environmental regulations hindered " -- 11 companies said "a great deal."

The survey (this one for the third quarter of 1995) made much of the fact that "39 percent of respondents" said they were dissatisfied with the handling of their applications for environmental permits, a finding pollster Richard Clinch called "quite significant."

Perhaps. But it was about 39 percent of 34 companies that actually had applied for a permit -- 12 of 250 firms surveyed.

Still I'd agree that 39 percent is too high. I also would not break my back striving for total satisfaction, given some of the things I've seen companies request of regulators.

A more important point, however, came out strongly in focus groups the France Center ran with business and environmental groups:

"The relative strictness of [a state's] environmental regulations has a relatively minor impact on firm location decisions "

Also this: "[Business] is more concerned about the number of permits and possible delays than the strictness or cost of compliance."

Agreement was not total here. Business types also felt strict regulations gave an important perception of the state as a poor place to come and do business.

Still, there is much common ground in the above; and perceptions seem more an education problem than a call to weaken environmental protection.

For example, I have seen Maryland homebuilding interests whip up crowds with horror stories of how endangered species in Texas, California, Florida, etc., stopped a development -- never an example close to home, though.

The France Center provides at least a starting point for getting beyond the anecdotal stuff in sorting out what is important.

From the focus groups, other nuggets emerged, counter to "anecdotal" wisdom:

* Business and environmentalists felt decreased funding and staffing for regulatory agencies were harmful, leading to delays, and poorly trained and unresponsive personnel. Congress, trying attack environmental regulation by slashing the Environmental Protection Agency budget, should take note.

* Maryland is "downstream" from water pollution via the Susquehanna River in Pennsylvania; also from dirty air from as far away as the Ohio River Valley. These create regulatory pressures the state by itself can do little about.

Which leads to a final point: While the economic tide may be

running to "business-friendly" states like Texas and North Carolina, an environmental tide is running another way.

It is no coincidence that Carolina's Pamlico and Albemarle sounds and Texas' Galveston Bay have joined EPA's National Estuaries Program to restore their troubled waters.

The model for that program is none other than our own Chesapeake. It's a two-way street. Make Maryland business-friendly, to be sure; also work to ensure every state treats its environment with the same care as the bay.

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