Lip service to business, but not enough state aid

April 04, 1999|By BARRY RASCOVAR

MARYLAND's business climate has been a hotly contested issue for decades. Is the environment so hostile to companies that it chases away jobs?

Judging from what's happening in the State House this year, critics have a good case. Corporate leaders are finding it increasingly difficult to argue that Maryland is trying to help -- rather than hurt -- the business community.

Sure, there are isolated instances where the state goes all-out. Take Marriott International. When the Bethesda-based hotelier started scouting Virginia for possible headquarters sites, a lucrative aid package was assembled -- with legislative support -- to keep Marriott in Maryland.

But prior to that time, Marriott had expressed frustration with the business climate in this state. Its CEO even jumped on the Ellen Sauerbrey pro-business bandwagon last year.

Now Marriott is singing the state's praises. Who wouldn't after signing a fat incentive deal?

When Annapolis politicians see a need to court business, they try to be accommodating. Otherwise, businessmen have to scramble to preserve the status quo.

While there is growing recognition among legislators that Maryland must become economically competitive, this has not translated into passage of a raft of pro-business bills.

House and Senate leaders are sensitive to business needs, but the rank and file too often are guided by the political lobbies of the left, especially organized labor and environmentalists.

Ignores business

The situation has been exacerbated by Gov. Parris N. Glendening. He sets the agenda and tone for the General Assembly. Other than the Marriott deal, Mr. Glendening has been deaf to the pleas of business.

There's electric deregulation, for instance, a dense and complex subject. House and Senate committees diligently slaved over this bill to comprehend its intricacies and how best to help Maryland businesses and electric companies compete in a deregulated climate.

But the governor kept dropping bombs. He aligned himself with environmentalists and consumerists, adopting their line that utilities were nothing but Robber Barons, unfairly profiting from electric rates.

He demanded major concessions, including a big cut in rates. This, despite the fact Maryland's electric rates already are below the national average and far below rates of neighboring states to the north. He complained that businesses -- heaven forbid -- might gain major savings under electric deregulation, while home owners might see only a small savings.

That's not a pro-business stance; it is a stance that is openly hostile to lowering business costs.

Collective bargaining

The governor also has pushed for a collective bargaining bill that sends a chilling message to companies. Quiet administration efforts to help broaden the state's prevailing wage law to include school construction is viewed as an anti-business thrust.

Mr. Glendening and many legislators are aligning with asbestos attorney Peter Angelos to pass a bill that would remove caps on damage awards in asbestos cases. This would drive up insurance costs for all Maryland companies.

Meanwhile, the governor tried to subvert the business interests of race-track owner Joseph De Francis. This, too, sends a hostile message to Maryland companies.

The state Chamber of Commerce's top objective -- accelerating the 10 percent income-tax cut -- was ignored by the governor in favor of more spending. Another objective of the chamber, an east-west highway linking Washington and Baltimore suburbs, was shelved by the governor in last year's campaign.

And last week, the governor sent a representative to oppose a bill, championed by Baltimore business groups, that would spur regional cooperation in attracting new companies. The bill would create a $1.1 million fund to reward regional job-creation efforts; Virginia already has a similar fund, budgeted at $10.2 million.

Over the years, Maryland's economic development secretaries have tried valiantly to work with companies. It's difficult, though, when Maryland's chief executive condemns businesses for seeking lower electric rates, blocks more immediate tax cuts, sides with unions and environmentalists and opposes regional cooperation.

When it comes to giving speeches before corporate leaders, the governor and legislative leaders crow about turning Maryland into a more business-friendly state. But they don't seem to be making much progress in moving from words to deeds.

Barry Rascovar is a deputy editor page editor.

Pub Date: 4/08/99

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