NEW YORK -- Gov. Parris N. Glendening came to Wall Street yesterday to assure the banking community that Maryland remains a good investment despite the prospect of massive federal budget cuts.
During a luncheon with 30 investment bankers, he offered a sketchy outline of a tax and economic plan that he said would help overcome the financial challenges facing the state.
The governor and Maryland Comptroller Louis L. Goldstein, plus a small entourage of other state officials, treated their guests to chicken Marsala and avocado salad at the City Midday Club, a window-lined room perched 50 floors above the financial district.
Their immediate goal was to drum up enthusiasm, and maybe a better price, for a $150 million state bond sale Oct. 11. Maryland already enjoys an excellent credit rating.
The luncheon also gave Wall Street a chance to look over the new governor and gave Mr. Glendening the opportunity to position himself further as a pro-business, pro-jobs chief executive.
"I want to emphasize that Maryland is a very financially sound state," he said.
Repeating themes he has frequently sounded back home, he said he plans to introduce legislation in January that would lower personal income and business taxes, in an attempt to lure private sector jobs.
The governor said he will propose cutting income taxes from 5 percent to 10 percent, although he did not specify a time period for the cuts to occur.
He also said he likely will introduce special tax credits for companies that create a large number of jobs. Virginia has such a program -- and has used it to lure businesses away from Maryland, he said later.
Those ideas -- coupled with a reduction in business regulations and an attempt to award more state contracts to Maryland companies -- are in his plan to attract 90,000 new jobs by 1999, he said.
As he rushed to catch a train afterward, Mr. Glendening pronounced the luncheon a success. "I think, without exaggerating, I saved a few million dollars here today," he said, obviously pleased with his performance.
He acknowledged, however, that it would be hard to prove that the luncheon boosted the bankers' confidence enough to cause them to offer a better price for Maryland bonds. If it did, the gains would far outstrip the $5,000 cost of the luncheon and trip.
Several guests asked Mr. Glendening his view of casino gambling and his plans to cope with federal Medicaid cuts.
He said he personally dislikes casinos, but will wait for a task force report later this year before deciding whether he will support legislation to make them legal in Maryland.
As for Medicaid, he said he does not plan to use state dollars to replace the entire $2.4 billion cut in federal funds expected during the next seven years.
Maryland already has set aside almost $600 million to offset some federal losses, pay for the income tax cut, and cushion the state from unexpected financial blows, he said. For Mr. Goldstein, who has been comptroller since 1959, the trip was a chance to renew old acquaintances while doing what he does best: tout the state.
"We're proud of our record of continued strong financial management. We have nothing to hide," said the 82-year-old comptroller, exhibiting his trademark folksy boosterism.
Mr. Goldstein and Maryland officials first sponsored such a New York event in 1974. Since then, other states have followed suit, particularly when they had unusual financial conditions to explain.
Those meetings are not rare, but they are not everyday occurrences, several invitees said. Maryland has not held such a luncheon in about six years.
"Going to a Maryland meeting is generally a good use of time, because the state is rather well-run," said Robert W. Chamberlin of Dean Witter Reynolds. "You can go and ask questions at a meeting like this, and there are going to be two or three people in the room who know the answer."
The luncheon gave potential bond buyers a chance to "kick the tires personally rather than having to rely on news reports" about Maryland's finances and management, said Richard P. Larkin, a managing director at Standard & Poor's.
"The people in the investment community appreciate it. Does that translate into a better purchase price for the state? I don't know. It could," he said.
Maryland is one of five states that enjoy the highest possible rating -- AAA -- from the three major bond rating agencies.
The rating enables Maryland to borrow money at a lower interest rate, saving taxpayers in interest costs. The bonds pay for schools, prisons, museums and dozens of other construction projects.