LGBTQ executive order threatens legality of Baltimore's minority set aside program

An executive order signed by Mayor Catherine Pugh that opens up the city’s minority set-aside program to enterprises owned by those who identify as lesbian, gay, bisexual, transgender and queer was celebrated by LGBTQ advocates, who said it would open the door to millions of dollars in potential business and lead to the creation of new jobs. We certainly applaud the intent. But the way it was done could put the whole minority business program in jeopardy.

Such programs are meant to ensure minority and women-owned companies get a fair share of city business, but municipalities have to conduct disparity studies to prove groups are being discriminated against before they can legally create them. This requirement stems from a 1989 Supreme Court decision, City of Richmond v. Croson, that said the programs were otherwise unconstitutional, violating the equal protection clause of the Fourteenth Amendment. Disparity studies also have to be conducted periodically to see if the city is adequately doing business with minority and women-owned businesses. The last study, according to the city’s website, was published in 2014 and included no data on LGBTQ-owned businesses.

The mayor’s executive order makes no mention of a disparity study but said the preferences would go into effect immediately.

After questions from The Sun, city officials said they will conduct another disparity study of the entire program next year but are unsure whether that analysis will cover LGBTQ businesses. Any inclusion of these businesses in the set-aside program would not occur until such a study is done, a city spokesman said, to ensure that such preferences are in accordance with the law. In the meantime, businesses can register with the National LGBT Chamber of Commerce, he said.

That the city did not heed this requirement before Ms. Pugh signed the executive order is surprising. It’s not just that the requirement was much in the news recently, when Gov. Larry Hogan ordered such a study through executive order after pressure from the Legislative Black Caucus, which justifiably complained about the lack of diversity in the pool of businesses awarded licenses under the state’s medical marijuana program. It’s that City Solicitor Andre Davis was the federal judge who shut down Baltimore’s minority business enterprise program in 1999 for not being based on an adequate study. The city had been sued by Associated Utility Contractors of Maryland Inc., which contended contracts should be awarded on the basis of low bids and not race or gender. And then-City Councilwoman Pugh served as chair of the economic development and labor subcommittee and played an instrumental role in restructuring the program so that it passed constitutional muster. “The fact that we didn’t have enough records to prove the bill was necessary was probably a disappointment to all of us,” Ms. Pugh told The Sun at the time. Why would city officials think the standards were any different now?

Mayor Pugh has been a strong proponent of minority and women-owned businesses throughout her career, and she is a successful business owner herself, having run a small marketing and public relations firm for years. She is also part owner of a consignment shop in West Baltimore. Certainly she would not want to jeopardize a program that helped business owners like herself. Perhaps it was an oversight. Whatever the reason, the city needs a new disparity study that includes LGBTQ businesses as soon as possible, even if it means a delay in preferences for them.

Without a disparity study, the program is in a vulnerable position that could put the city back where it was nearly 18 years ago — scrambling to prove the constitutionality of its law. Whether this lapse would put the whole program at risk or just the preferences for LGBT firms, it invites a legal challenge Baltimore doesn’t need. That would be a blow to a city that is majority black and where the last disparity study shows that Baltimore still isn’t doling out enough business to minority and women-owned firms.

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