Higher minority set-aside sought

State-backed report convinces governor more must be done

January 17, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

Gov. Parris N. Glendening will propose raising the percentage of state business reserved for minority-owned companies from the current 14 percent after receiving a report showing persistent, disparate treatment of such concerns in lending and procurement.

Major F. Riddick Jr., the governor's chief of staff, said yesterday that the administration will call for a minority "set-aside" between 17 percent and 27 percent. He said the governor also would seek "carve-outs" guaranteeing certain percentages of business for African-American companies, which the study identified as those most likely to face discrimination.

The findings in the report from the Chicago-based National Economic Research Associates (NERA) could bring the explosive issues of race and affirmative action to the forefront of the 2001 General Assembly session.

"It's going to meet some resistance," said Del. David R. Brinkley, a Frederick County Republican whose committee received a briefing on the report.

The report struck a nerve with African-American legislators.

"The findings are very discouraging, but they pretty much confirm what we already know," said Del. Joanne C. Benson, a Prince George's County Democrat.

The state-sponsored report, based on a survey of almost 9,000 minority business enterprises and nonminority companies, found "statistical and anecdotal evidence of discrimination against MBEs."

The report was commissioned to determine whether there was enough statistical evidence to justify the continuation of the state's minority set-aside program in light of federal rulings. The courts have brought affirmative action programs such as Maryland's under "strict scrutiny" since a 1995 case in which the Supreme Court demanded "compelling" evidence of past discrimination to justify such remedies.

NERA reported that marketplace discrimination does make it more difficult for minority companies to compete for business from the state and private contractors.

"Under reasonable interpretations of current affirmative-action law, the state may have sufficient evidence to show that it has a compelling interest to pursue affirmative action in order to help remedy the effects of discrimination on MBEs," the report said.

Riddick said the report, which compared the use of minority contractors with their availability, could justify a set-aside as high as 27 percent. But he told committee members that the administration would not seek to go that high. "You will not see a piece of legislation that says 27 percent," he told the House Commerce and Government Relations Committee. He said the exact percentage has not been decided.

Riddick added that the legislation would seek to "carve out" certain percentage goals for African- Americans and perhaps for other minorities. For black contractors, such a provision would address a belief long held by some that a disproportionate share of the business reserved for minority business actually goes to companies run by white women - sometimes as fronts for white males.

When Glendening came to office in 1995, he proposed raising the amount of goods and services to be bought from minorities from 10 percent to 18 percent. The General Assembly gave him half a loaf, approving an increase to 14 percent.

Critics of set-asides have suggested that the program should be phased out, but the report gives Glendening ammunition for a fight to expand the program.

Jon Wainwright, a consultant with NERA, said that Maryland has actually been exceeding the 14 percent goal in recent years.

"I think the state deserves a big pat on the back. It's progress, and it certainly should be recognized as such," he said.

But Wainwright said the survey shows that white contractors' use of minority subcontractors drops off sharply when there are no set-aside rules in place. He said 50 percent to 80 percent of minority subcontractors reported that the prime contractors who use them on state government jobs never contact them on private-sector projects.

Gretchen Wyatt, a spokeswoman for the Maryland Bankers Association, said she could not comment because she had not read the report. A spokesman for the Associated Builders and Contractors of Maryland could not be reached to comment.

Brinkley said Republicans had concerns about the validity of the study and the cost of the governor's proposals. "What we want to ensure is that the state gets the maximum bang for its dollar. We certainly want to make sure the wealth is spread, but we don't want to make that the major criteria."

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