By Michael Dresser, The Baltimore Sun
6:18 PM EDT, October 4, 2013
Several candidates for governor — a Democrat and three Republicans — said Friday that they would cut taxes to improve Maryland's business image and revive its ailing manufacturing sector.
The three Republican candidates and Democratic Attorney General Douglas F. Gansler each promised tax relief in different forms as they appeared at a forum sponsored by the Regional Manufacturing Institute of Maryland.
The candidates emphasized the importance of bringing more manufacturing jobs to Maryland, which has seen employment in that sector shrink by roughly one-third since the start of the recession.
Maryland's business climate has long been the subject of partisan debate, with Republicans pointing to a survey that ranked the state among the least friendly and Gov. Martin O'Malley citing another that ranked Maryland No. 1 in entrepreneurship. O'Malley recently tangled with Republican Gov. Rick Perry as he sought to lure Maryland businesses to Texas.
Friday's forum brought at least some bipartisanship.
"We're losing jobs exponentially," said Gansler, noting that the state ranks 43rd in manufacturing jobs. "It's absolutely unsustainable. We can't last forever … depending on federal jobs."
Lt. Gov. Anthony G. Brown, a Democrat who hopes to succeed O'Malley, did not appear, citing a scheduling conflict.
Of those who attended, only Democratic Del. Heather R. Mizeur of Montgomery County did not promise a tax cut while presenting a plan to revive Maryland's once-mighty manufacturing sector. She said she would unveil a tax proposal later this fall.
All three Republicans — Harford County Executive David R. Craig, Anne Arundel County Del. Ron George and Charles County business executive Charles Lollar — promised aggressive steps to lighten the regulatory burden on Maryland businesses.
"First of all, we need to retain," said George. "We need to stop the bleeding."
Craig said he would make the state Department of Business and Economic Development, which is charged with attracting companies, the lead agency in regulatory decision-making.
A spokesman later said Craig would give the business agency a clearinghouse role, performing a "cost-benefit analysis" of rules proposed by regulatory departments in such areas as the environment, health and labor.
"The agency would have the power to veto regulations under certain criteria when it could be concluded there is jobs impact," spokesman Jim Pettit said.
Gansler and Mizeur also promised a review of state regulations, though both emphasized the need to keep environmental protections.
Gansler criticized the performance of the state's economic development agency. He said the department's response to inquiries from out-of-state companies looking to relocate here is: "We're open for business, and that's the end of the conversation."
The attorney general repeated his call to trim the state's corporate business tax from 8.25 percent to 6 percent. He said he would raise the threshold for inheritance taxes from $1 million to $5 million to encourage wealthy retirees to remain in Maryland.
Gansler reminded the manufacturers group that Maryland is a heavily Democratic state. "You have the choice of a pro-business Democrat or what we have now," he said.
Justin Schall, Brown's campaign manager, issued a statement after the forum saying that Maryland Democrats would be shocked at Gansler's position.
"Doug Gansler is siding with the Republicans on a $1.6 billion dollar corporate tax giveaway that can only be paid for by slashing important investments we've made in education or raising taxes on working families and small businesses," Schall said. "That's just irresponsible."
The $1.6 billion figure is the Brown campaign's five-year estimate of the revenue Maryland would give up by lowering the corporate income tax.
Each of the Republicans offered his own tax formula. George called for a gradual rollback of the corporate tax to 5.75 percent and the top income tax rate to 5 percent. Lollar wants 5 percent applied across the board — corporate, income and sales tax.
Maryland's top corporate income tax rate is now 8.25 percent, and the sales tax is 6 percent.
Craig promised simply to cut "all of them," including the corporate tax and personal income tax. He repeated a promise to repeal the stormwater remediation fee derided by conservatives as a "rain tax."
None of the candidates who proposed tax cuts offered specific proposals on how to make up for the likely revenue reductions, at least in the near term.
Craig said the state would "receive more taxes in the long run if we would lower them."
Lollar said he could achieve the tax cuts he proposes by lowering the rates gradually, without drastic cuts in state spending.
The Republican candidates said Maryland should move forward with hydraulic fracturing, saying the method of injecting water and chemicals under pressure to extract natural gas from rock layers has been proved safe in other states. The audience appeared sympathetic to that view.
The state has put the controversial method, known as "fracking," on hold in Western Maryland, where some believe it could be the foundation of a lucrative industry, in order to study such reported effects as contamination of water supplies.
"We've been studying this thing to death," Lollar said. "It's time to open up the door."
Mizeur, among the leading skeptics of fracking in the General Assembly, warned that Maryland could put industries such as tourism at risk if it permits fracking without ensuring that it's safe.
"I don't think that anybody here is saying, 'Let's drill first and not worry about our water supply,'" she said.
Mike Galiazzo, president of the manufacturing institute, said the candidate turnout was heartening after many years of political leaders ignoring the sector because they thought it was dying.
"I see it as, 'We are making manufacturing a campaign issue.' It's as simple as that," he said. "We've never had Maryland manufacturing as a campaign issue, and these guys are saying, 'This is important.'"
The point of the event is not to pick a preferred candidate for governor — the institute does not issue endorsements — but for candidates to suggest ideas to help the sector grow.
"Manufacturing in Maryland deserves a level of attention that we haven't seen before," Galiazzo said. "My intent is, give us some ideas for improving the climate of manufacturing. And fundamentally, it becomes a strategy for us to be promoting."
Baltimore Sun reporter Jamie Smith Hopkins contributed to this article.
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