Glendening's TV ads draw Rehrmann's ire Program's commercials are misleading, she says

January 29, 1998|By C. Fraser Smith | C. Fraser Smith,SUN STAFF Sun staff writer Mike Bowler contributed to this article.

Democratic candidate for governor Eileen M. Rehrmann charged yesterday that Gov. Parris N. Glendening is using taxpayers' money for election-year commercials that put him on prime-time television -- where he overstates the benefits of a program to help families meet the cost of college.

"If you start now," says a smiling Glendening, surrounded by happy children in the ad, "you can save thousands of dollars with the new Maryland Pre-paid Tuition Program. And you can lock in today's tuition prices."

But, the Harford County executive charged, one can't really start now and one can't "lock in" anything. State officials acknowledge that, if tuition costs go up faster than the plan's investment earnings, the difference must be paid by the investor.

Under terms of the Higher Education Investment Act passed last year, parents would invest with the state program, hoping their money will

earn enough to meet the cost of tuition when their children are ready for college.

But the state law says this result cannot be guaranteed and that the state will not cover the difference between "today's tuition prices" and the price charged when the money is needed. The law also requires the program to post the disclaimer in any marketing -- television ads included, Rehrmann said.

Though Glendening in the ad urges parents to be ready financially, the program itself won't be ready for about a month.

Calls to a toll-free number listed in the commercial are met with promises to mail brochures when they're available. Financial studies are being completed to determine how much parent-participants must invest. About 10,000 Marylanders are expected to sign up in the first year, the Maryland program's marketing and public relations director, Douglas J. Neilson, said.

Rehrmann charged that the ads were running strictly to promote Glendening's re-election hopes -- an unavoidable conclusion, she said, because the program is not operating yet.

"There is no investment product ready in the marketplace, yet the first priority of the program was to use taxpayer money to put your face on prime-time TV and your voice on drive-time radio," she said in a letter mailed to Glendening yesterday and released to the press.

The TV advertising program, which began late last month and runs through this weekend, has cost about $100,000, including production costs and air time.

Glendening's press office referred a reporter's questions to program officials who called Rehrmann's charges reckless and ill-informed.

"If we're doing our job right," said Edwin S. Crawford, an investment banker who is chairman of the program's board of directors and its acting executive director, "investors will be locked in."

Crawford is a member of the University System of Maryland board of regents and served formerly as Glendening's campaign finance chairman.

And, said investment program board member Karl Spain, "Nothing in life is guaranteed, not even the full faith and credit of the state. But this program is set up in such a way that it is very fiscally sound."

Spain, president of the Journal Newspaper chain in Maryland and Virginia and one of the plan's primary advocates, said programs such as Maryland's work well only if they are "benefit driven" -- if participants are given assurances that the tuition costs will be covered -- and if they are heavily advertised.

He said Florida, which has been one of Maryland's models, has a $1 billion program with a $200 million surplus. Federal tax advantages granted to such programs and constant monitoring of investments enable the programs to keep the promises they make to parents, he said. Almost 40 states offer them, Spain said.

At the same time, Neilson said, the state will inform participants -- as required by law -- that Maryland does not stand behind the investments.

"It's not a guarantee. It's a hope," he said.

He said he's "comfortable" with the governor's use of the words "lock in" because plan participants will get the full story, )R including any disclaimers, when they call the toll-free number, ask for the brochure or visit the program's Web site.

The ads have been running for the last month on popular shows such as "Oprah," "Seinfeld," "Good Morning, America" and the noon news. The money was provided by the Maryland Higher Education Commission in anticipation of the bill's passing last year.

Pub Date: 1/29/98

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