As Maryland looks to re-energize its economy amid federal budget cuts and slow growth in the aftermath of the recession, the three Democrats vying to be the next governor each developed distinct — and detailed — plans for how to improve Maryland's business climate and promote job creation.
The party's dominance in state politics means that whomever emerges from next month's primary will be favored to win the general election, but several economists said none of the candidates' plans would provide a silver-bullet solution to the state's economic woes.
"Overall, every plan has something good in it," said Richard Clinch, a research economist at Battelle Memorial Institute, who has been following the state's economy for decades. "None of these plans go at the core of what Maryland needs, which is a comprehensive look at our tax and regulatory climate."
While Republicans sound consistent party themes about the need for broad and immediate tax relief, the Democrats present approaches that economists say have significant differences. And with the worst effects of the recession appearing to wane, the next governor could have a significant effect on how the state moves forward, experts said.
"The economy is finally getting to the point where we don't have to talk about increasing taxes to keep Maryland government funded," Clinch said.
Front-runner Lt. Gov. Anthony G. Brown's 17-page plan for the economy, released last week, takes what experts called a middle-of-the-road approach compared with those of his two opponents.
The primary theme of Brown's plan is to invest in physical and human infrastructure to create business incentives for specific industries and boost job prospects for residents.
Brown's five-part plan includes a series of tax credits and incentives, new programs and job-training proposals. For example, he suggests setting aside $8.5 million over four years to create a "workforce intermediary center" to train workers and connect them to businesses, and $1 million to create a micro-loan fund for small businesses.
He would cover the entire plan's $112.3 million price tag primarily with money derived from two major transportation projects: the Red Line in Baltimore and the Purple Line in the Washington suburbs. Brown estimated that the new jobs, construction and economic activity associated with the Purple Line alone would generate $24 million a year for state coffers.
Brown also suggested forming a commission that would look at overhauling the state's tax structure but did not suggest cutting or reducing any specific taxes. In debates and public forums, Brown has said that he doesn't see a need in the near future to raise any taxes.
Attorney General Douglas F. Gansler, who is trailing Brown in the polls, has drawn attention for his proposal to gradually cut the state's corporate income tax rate from 8.25 percent to 6 percent, which would match Virginia's rate. He would couple it with closing loopholes that now allow some corporations to avoid paying taxes in Maryland.
Gansler, who has an undergraduate degree in economics from Yale University, has said that cutting the rate would increase economic activity in the state and would ultimately encourage businesses to stay here, generating more tax revenue.
Gansler's 30-point plan, presented in February, involves a broad array of incentives and programs, including raising the minimum wage to more than $10 per hour by 2015, three years faster than the plan approved by the General Assembly this year.
He would discount tuition for degrees leading to jobs in high-demand industries, so students majoring in cybersecurity, for example, would pay less for their education. Gansler also would encourage new manufacturing businesses by giving start-ups a two-year reprieve from state taxes provided that they promise to stay in Maryland for at least five years. And he would create a "one-stop shop" online portal that makes it easier for small businesses to identify and take advantage of tax credits, which he said would encourage small companies to hire more workers.
"It's a plan built around one core truth: Maryland needs more jobs," Gansler said when he released it.
Anirban Basu, an economist and CEO of Sage Policy Group, said that while both plans generally would be good for the state's business climate, they reflect a philosophical divide between the candidates.
"Anthony Brown is much more tilted to government intervention in the economy, that government can help," Basu said. "Douglas Gansler is more saying that government should get out of the way when it can. ... I don't think business people would agree on the proper approach, certainly in Maryland, where many of our top business people are politically progressive."
Gansler's communication's director, Katie Hill, contested Basu's characterization, saying the plan is less about the government getting out of the way and emphasizing that "the government should partner with the private sector."
Del. Heather R. Mizeur of Montgomery County, meanwhile, has offered a plan to raise the tax on millionaires and revamp so-called combined corporate reporting, which allows some corporations that do business in Maryland to avoid paying corporate taxes.
She would use the extra tax revenue — she estimates it at $200 million — to provide moderate tax relief to small businesses and families making less than $250,000 a year. But she also would call for businesses to eventually pay a mandatory minimum "living wage" of more than $16 an hour, as well as for paid sick leave for all workers.