Maryland's business climate improves But state continues to fight reputation of being unfriendly

January 18, 1998|By Jay Hancock | Jay Hancock,SUN STAFF

Business executives sometimes argue about when Maryland hit bottom as business-hostile territory.

Was it in the early 1980s, when interest-rate regulation forced credit card issuers into Delaware and caused Maryland to miss tens of thousands of new jobs and hundreds of millions in investment? Was it 1992, when Maryland landed a Frito-Lay factory in Harford County and then proceeded to levy a snack tax on the company's products?

Was it all those times that Maryland overachieved in Money magazine's annual list of "tax hells"?

Whenever it was, many executives concede that Maryland's business climate has improved. They disagree on the degree. They all emphasize that major problems remain.

But business people from a broad spread of industries give political leaders at least a grudging "C" for effort in making Maryland more job-friendly, and often they go much further.

"I think the business climate actually has improved," said Champe C. McCulloch, president of the Maryland Chamber of Commerce. "That is still far short of saying that the business climate is what it needs to be for Maryland to be in the top rank of competitive states."

Much of the rosier evaluation, even government leaders acknowledge, has to do with Maryland's economic improvement in the past two years. Complaints about the business environment seemed loudest in 1995, when it became clear that Maryland was still struggling to recover from the 1991 recession.

"The recession is over, so everybody is feeling better," said Carolyn Burridge, a lobbyist for private transportation and chemical manufacturing interests in the General Assembly.

But even Robert O.C. "Rocky" Worcester, president of the conservative Maryland Business for Responsive Government, says the answer to the question about whether the state's business climate has improved "is a qualified yes."

Besides cutting the mainly symbolic snack tax, Maryland's General Assembly and Gov. Parris N. Glendening have:

Cut the state's personal income tax by 10 percent over five years.

Appointed an ombudsman to help businesses solve government problems.

Passed laws intended to speed redevelopment of abandoned "brownfields" industrial sites.

Boosted the "Sunny Day" economic development fund for luring and retaining major employers from $5 million to more than $20 million annually.

"I think we are making progress," G. Jay Erbe Jr., vice president of administration for insurer USF&G Corp., said in an interview last month.

"If you look at where we are in December '97 compared to December '95, I can see progress on a lot of fronts. I think there has been a proactive approach by the counties and the state to address some of the permitting issues. There has certainly been action taken at the taxing level. And I see where we're starting to get some results," he said.

Regular polling by the University of Baltimore's Maryland Business Research Partnership lends strength to the notion that businesses' chilly view of Maryland government has warmed a little.

Two years ago, 35 percent of businesses queried in the partnership's survey scored Maryland as "pro-business" or "business-friendly." In three quarterly surveys in 1997 through September, that score rose to an average of 42 percent.

"The business community has changed how it views things," said Richard Clinch, program manager for the partnership, which obtains some of its finances from the state Department of Business and Economic Development. State leaders "can take a strong degree of credit for the change in perception of the business climate, and you can't change perceptions just by talking."

Perhaps the most widely noted and heartily endorsed changes are found at the Maryland Department of the Environment and Maryland's Occupational Safety and Health, regulatory agencies accused by business in the past of intransigence, pedantry and laziness.

"When I came on board" as chamber head several years ago, "MOSH was really one of those agencies where people would say, 'Those blankety blank people,' " McCulloch said. "And that has changed completely."

John O'Connor, Maryland's commissioner of labor and industry and MOSH's boss, McCulloch added, "has just put their heads in a different place so that they understood their job was not to go out and be the safety police and say, 'Gotcha,' but to work with business and make sure the workplace is safe. They're not giving anybody a break, but they'll work with a business to make sure the business knows what it's supposed to be doing and that the business has an opportunity to do it."

About the environment department, "I just simply don't hear the complaints out of the manufacturers that I did four and five years ago," Burridge said. "Nobody's loosened up on regulations, but there's just a better understanding of responding to permit applications and developing everybody's expertise at the beginning of permitting instead of at the tail end."

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