By Jamie Smith Hopkins, The Baltimore Sun
February 24, 2013
Maryland's business leaders are increasing efforts to speak with a louder, more unified voice to state officials, seeing in looming federal budget cuts the necessity — or opportunity — to focus more attention on the private sector.
The Maryland Chamber of Commerce is organizing business groups, trade organizations and employers across the state in a "competitiveness coalition" that aims to agree on a handful of priorities and talk about them with everyone — elected officials, candidates and the public.
Lobbying also was a theme of a business-climate summit last week in Annapolis. Almost 400 gathered to hear speakers at the event, organized by Change Maryland, a group started by a businessman who contemplated a run against Gov. Martin O'Malley in 2010.
"One thing I hear a lot is that businesses aren't included in the discussion," state Sen. Allan H. Kittleman, a Howard County Republican, told the crowd. "And what a wise person once told me is, if you're not at the table, you're on the menu."
Officials with the state Department of Business and Economic Development say they've been reaching out to companies more over the last several years and putting suggestions into practice. But the big changes some hope for, such as tax cuts and so-called "right to work" rules undercutting unions, would be a tall order. Those issues skew conservative, and the state has twice as many registered Democrats as Republicans.
Just as importantly, the business community doesn't have much clout in Annapolis. Its influence has waned over the decades as big corporate headquarters turned into branch offices, leaving fewer CEOs to push for policy priorities, said Richard Clinch, a University of Baltimore economist.
That drain isn't just a Maryland problem — nationwide consolidation has put more big companies in fewer cities — but it has left the state with the headquarters of only a handful of Fortune 500 companies, he noted.
"If I was going to tell businesses where to put their money, I'm not sure lobbying in Annapolis is where I'd put it," said Clinch, director of economic research at the university's Jacob France Institute. "I'm not sure it's going to work."
The looming threat of federal cuts in a state highly dependent on federal spending isn't enough to get businesses the laws they want or stop the ones they don't, he added.
"Until we're in the middle of that [pain from cuts], we're not going to do anything about it," Clinch predicted.
The state Chamber of Commerce isn't counting on an immediate shift. Its competitiveness coalition aims to influence candidates in the 2014 state elections, and further down the road. Three dozen groups and a handful of large employers have signed on so far to take part.
Organizers are meeting now and hope to settle on a few key objectives at a September, said Kathleen T. Snyder, the chamber's president. She said she's excited about the possibilities, and pointed out that some of the groups involved lean conservative while others lean liberal.
"It's very seldom that the business community unites behind a common goal," Snyder said. "Maryland is at a crossroads with these federal budget cuts, and public policy can help us pick one road, so we have an obligation to help educate elected officials. … How can we work together to create more jobs?"
Snyder said businesses have proved they can effect change if they really try. Five years ago, businesses successfully banded together to get a just-passed "tech tax" on computer services overturned.
She characterized the chamber's efforts in cooperative terms, saying the state's economic development agency is open to discussions about increasing competitiveness. Change Maryland, by contrast, has positioned itself as an antagonist of O'Malley's administration, saying businesses and residents are fleeing the state because of his tax policies.
Speakers at the Change Maryland summit bemoaned the fact that the state ranks 41st on the Tax Foundation's business tax climate index.
Raquel Guillory, an O'Malley spokeswoman, defended the state's corporate income tax as "middle of the road for the region," higher than the rates in Virginia, West Virginia and New York, but lower than those in Delaware, New Jersey and Pennsylvania.
But Baltimore economist Anirban Basu, who spoke at the summit, suggested that the state eliminate that tax entirely. "You'd completely change the narrative about Maryland, and you'd create an excuse for people to pour private capital into the state," he said.
Steve Dubin, who headed Martek Biosciences Corp. in Columbia before selling the nutritional supplement maker for $1.1 billion in 2010, has heard a lot of suggestions — and gripes — about the state's business climate. That's because he's chairman of the Maryland Economic Development Commission, which has gone around the state in recent years seeking input.
He said commissioners didn't hear much about taxes, believe it or not. Regulation, particularly permitting, was top of the list. "'Make it easy to do business in Maryland' — that's the thing we heard over and over again," he said.
Dubin said the state is putting suggestions into practice, including a January revamp of the new-business registration process that's billed as decreasing review time from weeks to several days.
Dominick E. Murray, the state's secretary of economic development, said small businesses' suggestions also prompted a rule review that led to more than 130 state regulations being "either repealed, revised or streamlined" in the last year.
His message to businesses trying to pump up the volume: "We're listening."
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