Special session should put jobs first

Maryland legislators have a chance to boost employment by cutting taxes and spending

July 13, 2011|By Larry Hogan

Picking up the newspaper recently, I've noticed that the same topics seem to be dominating most of the local headlines: in-state tuition for illegal immigrants, higher tolls, gay marriage, state workers forced to pay union dues, crime at theInner Harbor.

But the topic that affects all Marylanders the most — the state's shaky economy and resulting business and job losses — doesn't seem to be garnering the attention it deserves.

About a month ago, The Sun's Jamie Smith Hopkins reported that Maryland ranked last in the nation in job creation — 50th out of 50 states, according to the U.S. Department of Labor.

What does that mean, exactly? The economy is still weak, and the competition to create, attract or retain new jobs has never been tougher. Unfortunately, Maryland climbs into that particular arena of combat with a number of crippling disadvantages.

In 2011, Maryland has both the fourth-highest tax burden in the nation and the fourth-highest increase in state spending. Even in the wake of the Great Recession, state leaders have had no qualms about spending more and just expecting citizens and small businesses to keep less.

Rankings of state business climates routinely place Maryland among the bottom half of all states. Meanwhile, our neighbor and competitor Virginia consistently ranks much higher. Maybe this explains why the Bureau of Labor Statistics found that Virginia's growth rate is higher than Maryland's, and that a greater percentage of its citizens have jobs.

By raising taxes (beginning with the record $1.4 billion tax hike of 2007) and spending (such as the 11.6 percent increase this year) in a recession, state leaders sent a strong signal to the business community and to potential investors that their priority is not growing jobs but protecting government. As a result, achieving real private sector job growth in Maryland has become just a hypothetical concept.

Running for reelection last year, Gov. Martin O'Malley argued that Maryland was weathering the struggling economy better than most states. He spoke of his vision to turn the state into a high-tech Mecca that would attract new jobs and investors from across the globe and he proudly proclaimed that his top priority was, "Jobs, jobs, jobs!"

But the reality does not match his rhetoric. Maryland has lost another 20,000 jobs — about 1 percent of the state's employment base — during the past year alone.

Some of the other headline-grabbing topics I mentioned earlier warrant attention. But none surpasses the importance of developing an immediate strategy for ensuring that the more than 200,000 unemployed Marylanders looking for jobs can find them.

Rather than just once again increasing spending, taxes, fees and tolls, state leaders will have an excellent opportunity to change direction and finally put job growth on the agenda when the legislature convenes this fall for a special session to redraw congressional district lines. Let's try something simple (but out-of-the-box for Maryland) by cutting spending and taxes, and getting the government off the backs and out of the pockets of small businesses. Let's actually focus on helping, rather than penalizing, the job creators.

In the short term, it sure would be great to see accomplishments coming out of the special session resulting in these kinds of headlines: "State enacts aggressive, sustainable private sector job creation plan," "New jobs plan contains specific, quantifiable goals and deliverables" and "Maryland copies successful job growth strategies from other states."

In the longer term, I would love to be able to pick up this newspaper one day and read the following: "Marylanders' tax burden, government spending decrease"; "State unemployment rate falls below 5 percent"; "Maryland business and job growth outpaces Virginia."

These headlines would attract new investors, businesses and jobs to Maryland. But that will not result from the kind of muddle-through-and-hope-no-one-notices strategies our state leaders have offered to date.

The economy is still in bad shape, and Marylanders are suffering. Ratcheting up the pro-jobs rhetoric, having another photo-op, or appointing another task force to make go-nowhere recommendations will not cut it this time.

We need to embrace a new paradigm. It's time to make real, meaningful, private sector job creation the centerpiece of our public conversation in Maryland, because no issue is more important.

Let's act now before we read about even more bad news.

Larry Hogan, a former state cabinet secretary, is the founder and CEO of a group of companies headquartered in Annapolis. He is the chairman of ChangeMaryland.org. His email is lhogan@hogancompanies.com.

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