Assembly minds business

Legislators' actions on wages, Wal-Mart called `anti-business'

April 12, 2006|By TRICIA BISHOP | TRICIA BISHOP,SUN REPORTER

The state's business community often hasn't had good things to say when the Maryland legislature convenes its session each spring, and that was certainly the case yesterday.

"This was about as low a point as the legislature can reach," said Aris Melissaratos, who was appointed by the governor as secretary of the state Department of Business and Economic Development. "Everything they touched was anti-business this year."

This year's session, which took place in an election year and pitted the Democratic legislature against the Republican administration, appeared to cause more concern than some others.

The General Assembly, which ended its three-month lawmaking session late Monday, passed several commerce-friendly bills. Perhaps the most prominent, supported by Gov. Robert L. Ehrlich Jr., allocates $15 million for stem cell research and makes Maryland the fourth state to set aside funds for such projects.

But several observers, from industry leaders to economics professors, said those efforts were overshadowed when the legislature overrode two gubernatorial vetoes to raise the state's minimum wage a dollar to $6.15 per hour, considered a hardship on small businesses, and approved a measure that requires Wal-Mart Stores Inc. to pay more for its employee health care and that captured national attention.

The legislature also spent the final weeks of the session in a pitched battle to block a 72 percent rate increase by BGE. The pending increase resulted from a deregulation plan approved seven years ago. Lawmakers also sought to toss out the regulators charged with implementing it.

`Radioactive'

"Maryland cut a deal in '99 to get BGE to go along with deregulation. Maryland has now [tried to go] back on that deal," said Thomas A. Firey, a senior fellow at the Maryland Public Policy Institute, a nonpartisan research organization that promotes policies based on principles of free enterprise and limited government.

"That should make businesses nervous," Firey said, contending it could hurt Maryland in luring business from elsewhere. "In the long run, it may be that the business community begins to look at us as somewhat radioactive."

Like other states whose industrial employment has shrunk, Maryland is in fierce competition for new business and job growth in fields such as life sciences and information technology. Just this week, a panel at the Biotechnology Industry Organization conference in Chicago counted Baltimore as one of the nation's top metro areas for biotechnology, partly because of two biotech business parks being built.

Legislative leaders say the General Assembly's actions are not anti-business, but labor- and consumer-friendly, and it doesn't deserve the rap.

"I'm getting tired of people like the governor bad-mouthing the business climate in the state of Maryland," said Del. Kumar P. Barve, a Montgomery County Democrat. "Take, for example, the stem cell research act. We're doing more to encourage the cutting-edge biotechnology business in Maryland with that one act than the combined efforts of the Ehrlich administration to promote business in the state."

Consumer organizations, meanwhile, applauded many of the legislature's efforts this year, including the minimum wage increase.

"That's something that we testified in support of," said Stephen Elmore, director of Maryland Budget and Tax Policy Institute, which focuses on how policies affect lower-income families. "It wasn't our impression at all in the session that it was anti-business."

When Ehrlich in 2002 was elected the first Republican governor since Spiro T. Agnew resigned the post to become vice president in 1969, the industrial community rejoiced. In the weeks after Ehrlich's election, respondents who said they viewed Maryland as a pro-business state rose to 51 percent from 47 percent before the election in a survey by the Jacob France Institute, the economic research center at the University of Baltimore.

By the fourth quarter of last year, the latest period for which data are available, the "pro-business" response was an all-time high for the survey at 69 percent.

But Richard P. Clinch, director of the Jacob France Institute, said that upswing may be challenged by the just-concluded session, the final one before this fall's gubernatorial election.

"It just makes Maryland look more foolish, the fighting, it just moves Maryland backward. That's both [the legislature and the governor], mind you," Clinch said. "States that get ahead in the game are states that work together. That's infinitely hard in an election year, and especially hard in a Democratic state like Maryland that's still smarting over the loss of the governorship to a Republican."

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