Franchot: Maryland's Economy on Wrong Track

Comptroller Peter Franchot argues the state needs to find a way to build businesses not casinos.

By Comptroller Peter Franchot

For anyone who remains unconvinced that the Maryland economy has lost momentum and is now moving in the wrong direction, the latest unemployment figures released by the U.S. Labor Department should remove all doubt.

The State of Maryland lost 11,000 jobs in June – the third highest total in the nation, trailing only Wisconsin and Tennessee.  This was our fourth consecutive month of job losses, and it elevated our state’s unemployment rate to 6.9 percent.

Disappointing as those numbers are, they don’t tell the full story.  Maryland also ranked 48th in Fiscal Year 2012 in both average private hourly and weekly earnings growth, and has actually experienced year-over-year declines in both categories.  This means that far too many people are bringing home smaller paychecks at a time when the costs of daily living expenses are on the rise.

For all of our bankable assets, the Maryland economy is in trouble.  Our current strategy – one that depends excessively on public sector jobs and government spending – simply doesn’t work anymore.  Nor, for that matter, will our relentless efforts to infuse even more slots parlors and casinos into Maryland, which is the purpose of next week’s bizarre special sesson of the Maryland General Assembly.  Maryland needs a fundamentally new approach to job growth, one that is focused squarely on the private sector.  Here is where I would start.

First, we must hold the line on new taxes.  The worst thing we can do to a consumer-powered economy is dig deeper into the pockets of those struggling to survive in the midst of tough times.  It’s pretty simple – businesses lose profits when consumers stop spending, and that ultimately leads to fewer jobs, declining tax revenues and diminished economic reinvestment in our communities.

To resolve our budget deficit and stimulate the economy, the State of Maryland has raised personal and corporate income taxes, sales taxes, alcohol taxes, vehicle titling fees and bridge tolls over the past five years alone.  Unfortunately, it hasn’t worked, as our structural deficit still exceeds $500 million, and we rank among the nation’s leaders in job losses.

Second, we must offer the private sector a fair and predictable regulatory environment.  The employers I’ve worked with respect Maryland’s efforts to safeguard our environment and protect the interests of both consumers and workers.  All they ask is that state rules and guidelines be presented in a straightforward manner, be enforced fairly, and remain consistent from one day to the next.

Third, we must improve our customer service when dealing with employers.  These are the people who are paying our salaries and generating the tax revenue for essential public services, and we should treat them accordingly.

That means returning their phone calls in a timely fashion, treating them in a welcoming and respectful manner, and answering their questions within a matter of minutes or hours – not days or weeks.

It means taking a few extra minutes to review that permit application and get the applicant an answer by the close of business, even if we technically have longer to complete the process.  Time is money when dealing with the private sector, and success typically goes to those states who are willing to outhustle their neighbors and show employers just how much their presence is valued.

Maryland is at a crossroads, and politics-as-usual won’t solve the problem.  It would be easy to either pretend these economic challenges do not exist because they are politically inconvenient, or to simply blame our partisan rivals for the mess.  It’s time to try something different. I believe these simple steps will send a clear message that the State of Maryland is once again ready for business, and that we are serious about leaving a stronger, more prosperous state behind for our kids.

John T. August 03, 2012 at 06:50 PM
The people with the hangup about taxation are usuall the ones who pay taxes. For the ones that simply love taxes and want to pay more, you are welcome to do so when filing.
Karl Schuub August 03, 2012 at 07:26 PM
Go ahead google "crackhead mayor DC" and you get along list of hits for Marion Barry - he was reelected too; a couple times. I'm thinking democrats have such low standards they vote for anybody that promises a check in the mail.
Karl Schuub August 03, 2012 at 07:31 PM
Delaware, Florida, North Dakota, Arizona...there are lots and lots of examples of states with much lower tax minimums than MD besides Mississippi. I think the straw that breaks the camel's back here isn't just the state and local but the long list of phoney fees and extra charges. For people that commute over any bridge or through any tunnel the "fee" will be fast approaching $1000 annually - just to go back and forth to work. I don't care if they wrap it in a bow and deliver it with a singing telegram it's a tax.
hawkeye August 14, 2012 at 04:00 PM
First, I have to say I'm impressed with the quality of the comments. No nastiness, no name calling…..wow. It's not just the living out of this state that is attractive, it's also the fact that businesses - both large and small - are leaving the state for ones that are more friendly to them. And seriously, JAG, if Maryland had a billion dollar surplus last year then you need to ask yourself why the 3M's felt the need to raise fees and taxes and hold a special session just to do that.
Shaka Zulu October 23, 2012 at 03:23 PM
The people of Maryland do not care about anything that has to do with responsibilty in government spending, they care about what is in it for me, and could careless who has to pay for it, the only states in the country that are doing well are run by republicans it is that simple.


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