Business finds little fault in the governor

Ehrlich receives praise for successes, not blamed for the efforts that failed

`He came out looking good'

Some criticism expressed about gambling emphasis

April 18, 2004|By Meredith Cohn | Meredith Cohn,SUN STAFF

By the time Maryland's Democratic-controlled General Assembly wrapped up this year's legislative session, it had voted down a popular tax shelter, imposed a corporate income tax surcharge and approved a budget expected to quickly fall out of balance.

And those were just three losses for the business lobby.

There was blame to go around Annapolis. But to the business community, none of it would be pinned on Gov. Robert L. Ehrlich Jr., the first Republican in the seat in decades. Some quietly quibbled that he was stubborn and singularly focused on expanding gambling in Maryland, but for the most part, the business establishment saluted his performance.

Political observers say he did the one important thing.

"He didn't go back on his `no- tax' pledge, particularly income and sales taxes," said Donald F. Norris, a professor of public policy at the University of Maryland, Baltimore County. "It's a right-wing mantra, it's a conservative mantra, it's a business mantra because it protects wealth."

Business also typically backs decreasing the size of government, Norris said. And because Ehrlich refused to consider new sales or income taxes in a time of revenue shortfalls, eventually the budget will have to be cut, "so, of course, he came out looking good."

Ehrlich entered the office with the support of the business community, which felt the former federal and state lawmaker from Baltimore County understood its needs.

Though his first two legislative sessions as governor have been marked by partisan conflict, his recent Democratic predecessors seemed to have rockier times, even when their business platforms were more ambitious, political observers said.

William Donald Schaefer became governor with a pro-business reputation from his legacy as the Baltimore mayor who crafted the Harborplace renaissance downtown. He wore out some of his welcome over time as recessionary pressures and years of spending forced a tax increase.

Gov. Parris N. Glendening devoted much of his early State of the State addresses to business themes and focused on job creation and tax incentives for businesses. But he alienated many business people with his strong objection to the Intercounty Connector project in suburban Washington and his Smart Growth agenda that discouraged development distant from the urban core.

Both of Ehrlich's predecessors finished their terms with criticism from the business community and the general public, said Alan Rosenthal, a professor of public policy at Rutgers University who has studied Maryland government. With Democrats in charge for so long, everyone became accustomed to criticizing them, he said.

Ehrlich, on the other hand, got the benefit of the doubt from business leaders from the beginning and has kept it - even as he treaded into traditional Democratic territory with such proposals as fees to fund cleanup of the Chesapeake Bay.

"Businesses favor Republicans, and they're willing to put up with deviance from a Republican governor, recognizing he's in a Democratic state," he said. "He's getting a bit of a honeymoon."

Kathleen Snyder, Maryland Chamber of Commerce president and chief executive, said the recently concluded legislative session included ample gains for business, including much of the transportation funding it advocated, tax credits to create jobs and overhaul historic buildings, cuts in red tape to clean up and reuse polluted Brownfields industrial sites, and authority for utilities and others to continue charging late fees.

And, most importantly, a large package of tax increases was defeated.

"[Ehrlich] kept his word," Snyder said. "We're very grateful for his leadership."

The chamber is not a strident opponent of taxes, she said, and advocated for an increased gasoline tax and other fees to pay for transportation projects. But businesses are paying their fair share, she said. In 2002, businesses paid $7.3 billion in state and local taxes.

Donald C. Fry, president of the Greater Baltimore Committee, a business group that seeks improvements in the region, said he believes that Ehrlich, with a limited reservoir of political capital, did what he could.

"Businesses provide jobs and provide the revenue that drives our economy. The government does not drive the economy," said Fry, who served with Ehrlich in the House of Delegates in the early 1990s. "[Ehrlich] recognizes that. Sometimes, the legislature has not fully appreciated what the business community means for the state."

Jennifer Duffy, an analyst for the Cook Political Report, a Washington newsletter that follows political trends and elections, said nothing is surprising about business people forgiving a Republican governor for lost battles. That is especially true for a Republican in Maryland: The party had not been in the governor's mansion since January 1969 when Spiro T. Agnew resigned as governor to assume the vice presidency under President Richard M. Nixon.

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