Anti-business reputation may hurt Glendening Particularly galling to corporate leaders was the governor's failure to give early, strong support to a large income-tax cut.

May 31, 1998|By Barry Rascovar

MARYLAND'S business climate has been a source of concern for decades. Are state politicians and regulators hostile to corporations? Do Maryland laws and attitudes chase companies away?

In 1977, Joseph G. Anastasi, state economic development secretary under acting Gov. Blair Lee III, issued a provocative and unprecedented report warning that Maryland's prosperity was threatened by high taxes and environmental restrictions.

That same debate resurfaced in the 1980s and in the 1994 elections. It will be with us once more, thanks to James T. Brady's sudden resignation as state economic development chief.

He made clear his disappointment with the Glendening administration's failure to embrace deep tax cuts, dramatically streamline environmental regulations or give business consistent support.

One private-sector leader put it this way: Mr. Glendening sees everything as "a political calculus." Each decision must solve a short-term election objective. Sometimes the governor tilts toward business, but more often he leans toward his core constituencies -- unions and environmentalists.

Particularly galling to corporate leaders was the governor's failure to give early, strong support to a large income-tax cut. Only when it became a political necessity did Mr. Glendening endorse a relatively small tax cut.

The departing secretary also chafed at the slow pace of change within the bureaucracy. Mr. Brady wanted fast action to cut restrictive, time-consuming regulations. He had modest success.

Polls apart

Business leaders are convinced there's an underlying antagonism in the State House. That notion was reinforced when the governor sided with environmentalists against business interests in killing the Inter-County Connector, which would have linked Gaithersburg, Rockville and northern Montgomery County to Prince George's and the southern tier of the Baltimore region.

It was reinforced when the governor didn't help stop state Senate President Thomas V. Mike Miller from sabotaging Baltimore Gas and Electric Co.'s request to form a holding company.

That action -- or inaction on the governor's part -- is being peddled as the latest example of official hostility to business. State leaders don't see why it's so important to build a close, continuing relationship with companies.

Part of this stems from Maryland's strong labor unions and historic public concerns for protecting the Chesapeake Bay. Also, legislators and the governor increasingly count heads before acting: There are far more votes among union families and environmentalists than in the households of corporate executives.

Business leaders, for their part, have failed to help their own cause in the state capital. They rarely act as Maryland boosters.

Groups such as the state Chamber of Commerce and Marylanders for Responsive Government have developed a reputation as chronic complainers about Maryland. They "wouldn't know how to be positive if AT&T moved its corporate headquarters to Towson," said one veteran of the economic development wars.

Indeed, the notion of Maryland's hostile business climate was created and perpetuated by the state's own business leaders, many of whom seem happy only when knocking Maryland. You won't find that happening in Virginia or North Carolina.

Nor have corporate bigwigs taken the lead on vital public issues, such as establishing statewide school standards or making higher education a permanent priority. That occurs in Virginia and Texas and a raft of other states.

Instead, business leaders are perceived as special-interest advocates, looking out only for No. 1.

Corporate executives have valid points that Mr. Glendening hasn't been a consistent friend, and that legislators don't feel a burning need to vote for the business agenda. They are correct that bureaucrats still hold them suspect.

And yet the business climate here is far from frigid. The governor targeted selected business sectors for substantial tax relief. Income taxes are coming down. Mr. Brady did prod regulators to at least start streamlining permit procedures.

Critical shot

Mr. Brady's self-criticism is quite extraordinary. His remarks underline the business community's concern about the governor's attitude toward development.

It parallels the broadside Mr. Anastasi sent in the direction of Mr. Lee and suspended Gov. Marvin Mandel 21 years ago. That negative report played a role in Harry R. Hughes' upset victory over Mr. Lee the next year. Is history about to repeat itself?

Barry Rascovar is a deputy editorial page editor for The Sun.

Pub Date: 5/31/98

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