Signs point to gains in Annapolis

Business counts allies in state's prosperity and budget surplus

Tax cut, anyone?

Economic development also on wish list for Assembly session

Business outlook

January 12, 2000|By Timothy B. Wheeler | Timothy B. Wheeler,SUN STAFF

The booming economy and Maryland's budget bonanza could yield dividends for the state's business community in the General Assembly session that begins today in Annapolis.

Business leaders hope that the state's prosperity will prompt lawmakers to trim taxes and invest some of the $1 billion budget surplus in economic development. Odds are, from what legislative leaders and Gov. Parris N. Glendening are saying, executives will get at least some of their wishes.

"These are good times," suggests Donald P. Hutchinson, president of the Greater Baltimore Committee, which represents business leaders in the city and suburbs. "Everyone winds up happy when there are good times."

Optimism aside, the 90-day legislative session will not all be smooth sailing for business. It should feature familiar debates over contributory negligence, managed health care and unemployment insurance. New disputes also are likely over hospital rates, late fees and redevelopment of "brownfields," or contaminated industrial land.

On virtually every business leader's agenda, though, is a desire to see taxes reduced.

"The state has such a large surplus, some of that money ought to go back to taxpayers," said Kathleen Snyder, president of the Maryland Chamber of Commerce.

After rebuffing business pleas for tax cuts last year, legislative leaders now say they support accelerating the five-year reduction in personal income taxes, entering its third year. They also have pledged to abolish another tax targeted by business men and women.

"There's no question the time has come to get rid of the inheritance tax," said House Speaker Casper R. Taylor Jr.

The governor likewise favors ending the inheritance tax, but Glendening has said he would prefer to "invest" the budget surplus in needed government programs and projects rather than speed up the income tax cut.

Good times mean the Glendening administration will seek only a handful of relatively modest economic development bills this year.

"With virtually no significant unemployment in Maryland, except in a few regions such as Baltimore City, we don't need jobs for jobs' sake," said Richard C. Mike Lewin, secretary of business and economic development.

"What we need," he added, "is to upgrade the nature of jobs and confront the truly changing economy."

To smooth the way for new or expanding businesses, Lewin hopes to consolidate his department's portfolio of economic development loan programs, from 25 to 10.

He also wants to revamp the Maryland Science, Engineering and Technology Development Corp. -- shortening its name, expanding its board and giving it broader authority to make loans.

Administration officials hope to boost the $650,000 budget of Maryland's film office, estimating that movies and television productions injected $75 million into the state's economy last year.

The department also wants more money to promote Maryland as a place to do business, expanding a $2.8 million marketing cam- paign with the slogan "Come to Work, Stay to Play."

Responding to complaints, the administration supports overhauling the state's "brownfields" law, enacted three years ago to encourage voluntary cleanup of contaminated industrial sites. Developers have generally shunned the program, and Baltimore officials are spearheading efforts to make the law more flexible.

Speaker Taylor, long an advocate of economic development, has proposed creation of the nation's first technology court as a tool to draw more high-tech businesses to the state. The court would handle legal disputes over electronic commerce, including intellectual property, privacy and taxation.

Taylor also is advocating a $3 million subsidy for regional commuter airlines and a tax credit for research and development.

Ensuring adequate funding for highways and mass transit is a priority of business and legislative leaders, but it is unclear if any agreement will emerge.

After failing in a bid last year to raise the sales tax to finance mass transit, Taylor now proposes earmarking a portion of the existing 5 percent levy for rail and bus lines. That proposal is opposed by retailers, who fear that it eventually could lead to a sales tax increase.

On the health front, Maryland's hospitals will be looking for lawmakers to ensure that their financial woes are cured by a rate-setting "reinvention" due by next month from state regulators. Half of the state's 49 acute-care hospitals are in the red now, but insurance companies seeking to hold down costs may resist any proposal to boost hospital fees significantly.

Annapolis will be the scene of more disputes over managed health care, as physicians renew their bid to hold HMO medical directors accountable for decisions to deny patients coverage for certain services. The "practice of medicine" bill passed the Senate last year, but died in the House.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.