Brady legacy eye on future Test is whether business-friendly changes hold up

Strong economy a factor

Rightward political tilt seen keeping attention on growth

Business climate

May 03, 1998|By Jay Hancock | Jay Hancock,SUN STAFF

Three years ago, Maryland's economy was listless. Gung-ho businessman James T. Brady was the new economic development secretary. And Gov. Parris N. Glendening was saying, "We need to send a message that says: You need to do business here."

Now the economy is humming but not booming. Brady resigned last week, partly over differences with the governor. And Glendening is saying that "business interests must be balanced with education, health, public safety and other priorities."

The iron no longer seems hot for business-driven policy changes in Maryland.

"The governor and his advisers don't feel under as much pressure to reduce taxes and make overtures to the business community as they did four years ago," said Matthew Crenson, a political science professor at the Johns Hopkins University.

"The economic atmosphere has changed. The governor has eliminated some of the pressure that operated on him."

Many people -- business executives included -- credit the changed attitude partly to improvements wrought by Glendening and Brady.

Maryland is moderately cutting personal income taxes, which were deemed a business deterrent.

The state is more aggressive and focused at recruiting and keeping companies.

Environmental and safety regulators have reportedly eased up on arbitrary and hostile enforcement.

"I think that the state really is a much better place to do business," said William Couper, president of NationsBank Corp.'s Greater Baltimore operations.

Brady, he added, "didn't achieve his entire agenda, but he put a lot of points on the board."

At the same time, business people still see room for improvement.

As Maryland's neighbor states escalate corporate come-ons, business advocates here want more tax cuts, less red tape and less government generally.

And they fear that, as the booming national economy has buoyed Maryland's own performance above the tolerable level, the political will to execute those changes has faded.

Three years ago, "there was a sense of crisis" about Maryland's business climate, said Alex Doyle, president of Micro Machining Inc. in Baltimore. "Probably the level of urgency has dropped off somewhat. But at the same time there are some serious problems that still need to be addressed."

Much will become clearer in November. Glendening is up for re-election, opposed by his 1994 Republican opponent, Ellen R. Sauerbrey, as well as challengers from his own Democratic Party.

The degree to which business climate becomes a campaign issue -- and how voters respond -- will set the course through 2002.

"This election to some degree is going to be a test of how much desire there is for more fundamental change in the way Maryland deals with the respective roles of government and business and the private sector," said Champe C. McCulloch, president of the Maryland Chamber of Commerce.

If Maryland hews to history, the perceived importance of being business-friendly may be fading along with the unemployment rate.

Economic anxiety spiked more than a decade ago as manufacturing jobs evaporated and onerous banking regulations diverted additional jobs into Delaware and other places.

But the Reagan-era defense-spending and real estate booms numbed the hurt, and those warning about the business climate became a generally ignored minority.

Short memories

"People in Maryland have short memories," said Robert O. C. "Rocky" Worcester, chief of Maryland Business for Responsive Government, a conservative group founded in the 1980s fit of concern.

Part of it has to do with Maryland's economic and demographic makeup. Despite Baltimore's reputation as an industrial base, Maryland ranks almost last among states for manufacturing jobs as a proportion of total employment. And it ranks near the top in its reliance on government jobs, according to figures supplied by Regional Financial Associates, a West Chester, Pa., economics research firm.

"Maryland is very largely a bedroom community, benefiting enormously from federal jobs in the District of Columbia," said Charles McMillion, chief economist for MBG Information Services, Washington business research and forecasting firm.

"And as bedroom communities look at business development and economic growth with a skeptical or critical eye, the culture has not been supportive of economic development."

McMillion credits the Glendening administration with successfully addressing both economic issues and "quality of life" concerns, such as environment and education, that traditionally have occupied the Washington bedroom towns.

Glendening's "Smart Growth" policy of steering development into already built-up areas is "one of the ways that development was made more palatable in communities around the state," he said.

Growing complacency

But some Marylanders think Smart Growth is essentially a nice name for business restriction. And they worry about growing complacency about business conditions that will vanish only when the next recession comes.

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