ANNAPOLIS – Gov. Parris N. Glendening, meeting two weeks ago with key advisors, confronted some ominous figures:
* More than 50 federal programs in Maryland, worth tens of millions of dollars, may be either cut or eliminated next year.
* Up to 60,000 jobs from the federal government and related businesses may be lost in the next few years.
* Welfare reform measures are pushing thousands of current recipients to find employment, but the number of entry-level jobs does not approach the number of AFDC recipients.
The public sector is shrinking. But state officials aren’t waiting for Washington to crunch the numbers. They are asking the question now: How can those jobs be replaced?
Glendening has made it clear through policy statements, meetings and public appearances that economic development is the state’s top priority. He is challenging Maryland to add 90,000 new private sector jobs by the turn of the century.
“We’ve got a lot of work to do very quickly,” says Darlene Frank, spokeswoman for the Maryland Department of Business and Economic Development. “The governor raised the bar very high with his goals.”
Jobs come up again and again. During Monday’s announcement that the NFL Browns are moving to Baltimore, Glendening made a point of saying that the move will add 1,400 jobs and $123 million to Maryland’s economy.
And in an interview, Glendening expressed urgency. “Maryland will be more deeply affected than any other state through federal job cuts,” he said. “We need to look to the private sector.”
Since the beginning of the year, state agencies have scrambled to develop strategies to build Maryland’s business base. At the center is the Department of Business and Economic Development, led by James Brady, a former executive at Arthur Andersen & Co.
“We’re currently negotiating with 125 companies to expand those already in Maryland and to attract outside companies to relocate to Maryland,” Brady said recently.
Efforts are starting to pay dividends. Maryland saw a net increase of 3,500 jobs in 1995 through Oct. 1, state officials say.
In the past few months, the state scored a distribution center in Harford County for Saks Fifth Avenue, and invested $228 million to expand the Allegany Power facility. Each project will employ more than 300 people.
Meanwhile, Maryland is trying to make itself more marketable.
“What we want to do is look at the strength of each region,” Glendening says. “It’s high-tech in Montgomery County, information industries in Prince George’s and agriculture on the shore counties. We want to play to that strength.”
Glendening notes that in the last General Assembly, five business taxes were repealed and some overlapping regulations were dropped. And cuts in personal income taxes and the regulatory process are on the agenda for next session.
“We’re putting the tools in place right now,” the governor says.
Among them is the state’s first-ever comprehensive statewide economic development initiative. The plan, “Strategic Choices For Moving Maryland Forward,” outlines Maryland’s job push. It includes economic incentives, marketing prospects, and sketches of how Maryland will be more receptive to business.
Money is its backbone. More than 20 separate financing programs are in place to offer businesses loans, incentives and tax relief. Specific industries, like seafood, can apply for specific funds. So can businesses that offer day care.
Most Maryland loan programs have interest rates either below or at prime rate for up to 30 years.
Roger Dreschler, community finance director for the Department of Business and Economic Development, testified last month that loans are made after looking at a company’s long-term prospects for job growth.
Saks, for instance, will save money if it meets employment targets. The state will forgive interest on up to $2 million of the $3 million loan if Saks hires its projected 375 workers within the first three years.
The plan’s second component is marketing. Maryland has initiated a marketing blitz of magazines, newsletters and trade show visits to attract companies.
“Most of the time we’ll get a call that a company is interested in coming to Maryland,” Dreschler said in an interview. “Then it’s time for us to show the company the advantages of coming here.”
That is done through efforts of the department, the Maryland Chamber of Commerce and businesses already here.
But sophisticated as it is, the effort has its critics.
Richard O.C. “Rocky” Worcester, president of the conservative Maryland Business for Responsible Government, calls for fundamental tax and regulatory changes.
“Under Jim Brady, I believe the state has a superior pro- business advocate,” Worcester said. “Whether he will be able to overcome the systemic political constraints within the state is another question.”
Testifying in late October before the Joint Committee on Economic Development Issues, he called recent legislation “only a nice bow on the box.”
“The Legislature is not coming to grips with the fact that there needs to be a reduction in the size of government,” Worcester said. -30-