Business climate hot and cold in Md. Report ranks state in 160 categories against rest of U.S.

February 27, 1997|By Jay Hancock | Jay Hancock,SUN STAFF

Heat and noise have been the main products of the legislative debate over Maryland's business climate lately. A business-sponsored research group tried yesterday to shed a little more light.

The Maryland Business Research Partnership published what it called the most detailed report yet on this state's status as a place to employ and be employed.

As befits the increasingly competitive trade of interstate business recruitment, the study offers precise evaluations of Maryland's prospects that even a bookie could love.

How does the state stack up against the competition? In 160 categories, the report ranks Maryland not only against its mid-Atlantic rivals but also against every other state.

Telecommunications companies, for example, are keenly interested in states' phone-wire and cable networks. With 8.2 percent of its lines made of high-capacity fiber-optic cable, Maryland is 12th-best in the nation. And it's better than North Carolina (6.9 percent) but worse than Virginia (8.6 percent). The dozens of distribution-warehouse outfits moving to Maryland apparently aren't bothered by the fact that a nearly a third of the state's bridges are deemed deficient. That's worse than in 30 other states.

The report rates Maryland on crime (better than only New York and Washington, D.C., in one measure); poverty (12th best); banking resources (fifth best); and factory wages (seventh highest).

Most of the information has been available from separate government and private sources; some was included in previous reports on Maryland competitiveness. But the new study is three times bigger than other reports, said Richard Clinch, program manager for the Maryland Business Research Partnership, a business-financed group run from the University of Baltimore.

And it appears as Maryland's General Assembly again energetically debates the state's business environment, with an eye to doing something about it.

Maryland thrived for years on federal largess, defense spending and general East Coast prosperity. But the state has added very few jobs in the 1990s, and in recent years political discourse has increasingly focused on how to nurture the private business sector.

Many people think Maryland needs to cut taxes, specifically its personal income tax rate, to lure and keep more businesses. The General Assembly is considering a measure to reduce the personal-income levy by 10 percent. Many small, growing companies are taxed at the personal rate, and a cut would induce more of them to move to or stay in Maryland, advocates believe.

"We can and must do more to make our business environment more attractive and to promote our strengths," said Champe McCulloch, president of the Maryland Chamber of Commerce, which helps pay for Clinch's work.

Maryland ranks 25th nationally in state and local taxes as a percentage of total state personal income. But in per-capita state and local tax collections, Maryland is seventh highest.

Overall, the study reinforces previous research showing that Maryland looks good to businesses that value smart workers, solid infrastructure, proximity to customers, technology and science resources, well-run state government, quality of life and a nearby federal presence.

With Maryland's concentration of technical brain power, university resources and research facilities, "we have an exciting entrepreneurial climate, but it has not led to significant employment growth in the state," Clinch said.

Maryland falls short, especially against neighbors Virginia and North Carolina, in "microeconomic" categories such as labor costs, tax rates and regulations, Clinch said.

Perhaps his most surprising finding, he added, was that the poverty and welfare rates in Maryland aren't "as bad as people say."

Maryland's poverty rate of 10.1 percent, he said, is better than those of 38 other states. Its percentage of welfare recipients is lower than in 26 other states.

The Maryland Business Research Partnership's phone number is 837-4988

How Maryland stacks up

I?Category .......... ..........Performance ....... .......Rank*

Five-year job growth ..... ..........0.5% ........ .........44

Five-year per-capita income growth ...17% ......... ........49

Median household income ... ......$39,200 ...................6

Five-year export growth .... .........93% ..... .............7

Black-owned businesses ..... ......35,800 ...... ............6

State/local taxes ........ ........$2,560 per capita.........7

Average hourly factory wage .......$13.50 ....... ...........7

Unionization ....... ........ ........16% ........ .........18

Adults with bachelor's degrees .......26% ......... .........8

Deficient highways .......... .........9% ..................21

Fiber optic telecom. cable ... ........8% ..................12

Research and development spending .$1,500 per capita.........5

Scientists and engineers .....9 per 1,000 workers ...........3

Poverty rate .......... ..............10% ......... ........38

* -- A ranking of 1 would be the highest among the states, a ranking of 50 the lowest.

Pub Date: 2/27/97

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