Looser Sunny Day Fund brings stormy weather

Legislators reluctant to surrender oversight over grant, loan deals

Economic development

October 01, 1999|By Thomas W. Waldron | Thomas W. Waldron,SUN STAFF

Maryland's economic development chief proposed yesterday that he be allowed to hand out millions of dollars in state financial assistance without legislative oversight -- a proposal that immediately drew opposition from both Republican and Democratic lawmakers.

Under the proposal, the secretary of the Department of Business and Economic Development would have authority to make grants and loans of up to $5 million from the state Sunny Day Fund and a second fund.

Economic Secretary Richard C. Mike Lewin presented the plan to a task force in Annapolis but lawmakers from both parties said the General Assembly is not likely to drastically change the system. Currently, a committee of legislative leaders must approve all Sunny Day Fund expenditures.

"The one thing it [the current system] does do, it keeps the administration honest," said Del. Michael E. Busch, an Anne Arundel County Democrat who is co-chairman of the task force considering a revamping of the state's economic development funds. "It's a real stretch to think the legislature is going to give up this legislative oversight of major loan deals."

Sen. Martin G. Madden, the Senate Republican leader, added: "The secretary's proposal would remove any legislative oversight of the vast majority of these very controversial funds. It's a step backward."

Lewin bristled at the Howard County Republican's assertion that he was trying to "grab" control of the funds.

Instead, he said, he was searching for ways to allow the state to move quickly when wooing businesses to either stay in Maryland or relocate here.

Some of the state's economic development funds already give the secretary the authority to grant a company as much as $2.5 million without legislative approval, Lewin said.

Plus, Lewin added, his counterparts in Virginia and Pennsylvania have much broader power to approve grants without legislative approval. "There's no power grab here. We're trying to formulate good public policy."

Lewin acknowledged, though, that his department has never lost a potential deal with a company because the legislature was slow to respond.

The state's Sunny Day Fund of nearly $30 million has been the subject of much scrutiny in recent years.

Republican gubernatorial candidate Ellen R. Sauerbrey last year accused Lewin's boss, Gov. Parris N. Glendening, of soliciting political contributions from companies that had benefited from the fund, and with rewarding his supporters with such grants.

Lewin made his proposal to a task force of legislators, local economic development officials and business people that is considering consolidating Maryland's economic development funds. The group is expected to recommend changes that the General Assembly will consider next year.

Busch said the legislature might agree to a more streamlined oversight process, perhaps involving a smaller group of legislators. "There may be more efficient ways that also have the same accountability to accomplish what everybody wants."

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