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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.

M. Sullivan July 31, 2012 at 08:52 PM
Virgina just ended fiscal 2012 with a $129 Million surplus. This is their third year in a row of surplus due mostly, to fiscal austerity, spending cuts, rather than tax increases. See the story: http://hamptonroads.com/2012/07/virginia-ends-fiscal-year-129-million-surplus . This is what can happen when Republicans control the legislature. I like casinos as much as the next guy, but they are not the cure for rampant fiscal irresponsibility by the govt.
jag August 01, 2012 at 04:27 AM
Not a very impressive example, M. Sullivan. VA Republicans are great because the state has a 129mil surplus? First, the only fiscally viable sections of the state are as blue as the sky. Second, Maryland had a BILLION dollar surplus last year. Your logic fails on multiple levels, but the suggestion of fiscal austerity is cute considering VA would still be completely irrelevant if not for bloated federal defense spending propping the state up.
Sandra James August 01, 2012 at 09:32 AM
Karen, The Govenor is a Democrat. We are in the same dilemma as when former Gov. Glendenning was in office. Maryland has now derailed such as many other states of the USA (bankrupt).
Sandra James August 01, 2012 at 09:42 AM
Parkville: I agree with you. I am a Maryland from birth (1950's), and my children now 25 and 27 have left the state and have no desire to come back. They saw the light early on (during their high school years) and attended college else where and left the state never to return. It is very upsetting to see the demise of once was a beautiful, clean, honorable state. Thanks Gov. O'Malley (and former Glendenning). I am trying to get out of here too, but am finding it difficult to align a new job and new home at the same time. So long Maryland my Maryland. Gov. O'Malley's concern is not about we the people, just ensuring "the Democrats secure" their position of control in the upcoming election.
Sandra James August 01, 2012 at 09:46 AM
Joe, The Democrats are the very vehicle for social programs. Didn't you know that Gov. O'Malley has been sponsoring "illegal immigrants" tuition for years (our taxpayer money). It will be on the ballot coming up in November.
patricia August 01, 2012 at 12:18 PM
Tax and spend, Tax and spend. Sound familiar. Sounds a lot like what the federal government is doing. Google- Stockton, California, that's exactly what they did and they just filed for bankruptcy. Maryland has always been a progressive state, O'Malley is a progressive politician, along with the majority of the other politicians from Maryland. What is funny is that he did the exact same thing during his first term, with " special tax raising sessions" in the legislature, but somehow he managed to get re-elected. Go figure! We pay an enormous amount of taxes, yet it's just never enough. Greece, here we come.
patricia August 01, 2012 at 12:24 PM
Congressman Ruppersberger(D), Senators Mikulski(D) and Cardin(D) all progressive career politicians bring home lots of federal defense spending, (Ft.Meade) to Maryland. As a matter of fact they brag about how well the do for Maryland's share of what they capture. So yours is not very impressive example. Nanny Nanny Boo Boo.
M. Sullivan August 01, 2012 at 12:36 PM
So, why does MD government have this desperate need for casinos and raising taxes?
Midge August 01, 2012 at 12:43 PM
Franchot is a Democrat from Montgomery County. I don't think he realized how much quick sand this state was standing in until he became Comptroller. He sees the books and knows the shell game that this has all become.
Paul Romney August 01, 2012 at 12:49 PM
My goodness, what a bunch of dismal whiners there are on this string. Let's be clear: our dilapidated and inadequate infrastructure is a direct consequence of our neurotic national hang-up about taxation. For all you folks talking about leaving Maryland for some more congenial, low-tax environment: Mississippi is that way.
TaL August 01, 2012 at 01:04 PM
What was it that Ms. Thatcher said...."Socialism is great till you run out of other people's money?"
robert snyder August 01, 2012 at 01:36 PM
P.G. has it backwards.. Its not "tax & spend, tax & spend". Its spend & tax, spend & tax.. We all want programs to benefit us and our own agendas, but then we don't want to pay for it. So, everyone gets something. We spend & spend, then go into debt (like the trillions at the federal level) then later worry (if at all) about how we are going to pay for it. And this has transpired over especially the past 40 yrs. (Rep. & Dem. administrations) ! The can keeps getting kicked further down the road. Our quality of life peaked in the 70s & 80s. We spent 5 trillion $$ on the last 3 major wars (Vietnam, Iraq and Afghan.) that US involved in; we spend $700 - $750 on the military/defense (about the same as the rest of world combined); more jobs go overseas; less is produced in the US; and of course we continue to spend the same on the big entitlements programs, etc.... so Maggy Thatcher SHOULD have said (thinking of the US): "Capitalism is great till you run out of other people's money"
CP Resident August 01, 2012 at 02:21 PM
We can't afford to keep up our infrastructure because of bloated Union salaries. Why is it going to cost a billion dollars to extend HOV lanes a few miles further south along I-95? Why is the cost to extend Metro to Dulles unaffordable? Why do we need to turn to private (an frequently foreign) investors just to build the roads we need? The answer is simple - drive by any construction site and observe the "workers". Mostly they don't work at all, but they're making $20-50/hr and of course paying those all-important union dues. The second phase of Metro to Dulles would never be able to be built without non-union labor - it's just too expensive. A non right-to-work state like MD doesn't have a choice but to employ overpaid, underproductive union workers - and it shows.
Richard Rice August 01, 2012 at 02:37 PM
I will not leave the state. I am retired and living on a budget; I still love our state and though I disagree with the governor's spend every dime you get policy, I still love this state and Montgomery County.
FLRush August 01, 2012 at 02:40 PM
Thank you Mr. Franchot for sharing some common sense with all of us. I am 61 years old and born and raised in Maryland and a registered Democrat but in no way vote only Democrat. I voted for Ehrlich and was very impressed with the way Mr. Ehrlich and Mr. Shaefer worked together to run the State Government. O'Malley was only put in office by two districts in Maryland wth a majority of minoriity voters, after seeing what he did to Baltimore City, the Police Chiefs, Sheila Dixon on the take, Sheila Dixons sister on the payroll and never working a day in the city, increased crime rate, and so on, how could anyone in their right mind have voted for him as Govenor ? Since day one all we hear is that the State is broke and not one time have I heard of any cost savings or cost saving plans. What about last winter, we did not save any money with the minimal amount of snowfall ? The new septic system regulations and costs are ridiculous. I thought that when the Lottery was approved the money was suppose to go to Schools, where does it go ? Building more Casinos is crazy and not the solution. How much money was transferred out of the transportation fund ? Maryland is certainly in a sorry state thanks to Mr. O'Malley and God help us if there are enough stupid people in the U.S.A. to elect him as President should he be nominated. We are all Americans and should work together regardless of our Political Party affiliations.
CP Resident August 01, 2012 at 02:46 PM
I love the state too - I have lived here essentially my whole life. However, what would you do if you had a broke relative who kept asking for money, but then spent it foolishly? You would probably still love them, but you sure as hell would stop giving them cash! I will be able to love Maryland just as much from next door.
Garb67 August 01, 2012 at 03:22 PM
So I guess that is why the capitalists are fleeing Md. in droves? And if you are referring to Md when you blame it on both parties, there has been only one Rep. administration in the last 40 yrs and Erlich took a $1Bil. deficit and left us with a surplus, unlike the clown that preceeded him. Oh, and by the way that same clown left his previous job (PG county Exec) a mere $100 Mil in the red. Kind of hard to lay any of this at the feet of the Rep. party which is outnumbered 2-1 in this state. Please own it.
TaL August 01, 2012 at 04:46 PM
Actually Frank, I think that culling of non-essential services and programs brings expenditures in line with revenues.
John T. August 01, 2012 at 08:44 PM
Frank. It's clearly not as simple as raising taxes to eliminate the deficit. We don't have a taxing problem, we have a spending problem. If they raise taxes, they will find reasons to spend it and we wind up in the same predicament. Here's a novel idea, why not cut a few percent from each agency, then go after our wallets for more taxes if needed. Government - the only place where it is considered a cut if your department doesn't get the same percentage increase as last years budget. And we keep putting the same people back in every election! WOW!
Terri August 01, 2012 at 09:14 PM
O'Malley should hang his head in shame. And the heads of Michael Busch and Mike Milker should roll.......on a craps table. These 3 clowns together have turned Maryland into a big wasteland. And yet the same idiots vote them in again and again and again. People, please ask yourselves this: are you better off now or were you doing a little better when Bob Ehrlich was in office? He did the best he could while being mocked and ignored by the 2 Mikes. Bob wanted slots. Bad idea then. But suddenly it was a grand idea once he left office. Marylanders, pay attention. STOP voting in the same career politicians year after year. We need a break. We need intelligent voters to elect intelligent people who speak OUR language and not the schmoozy hype of lobbyists and scumbags.
Terri August 01, 2012 at 09:18 PM
And to Karen Essen. I got the sarcasm that some others didn't. Very funny! Yes, keep voting the Democrat ticket everyone. Nothing better than having money stolen from you even before AND after it reaches your wallet.
Parkvillehoney August 02, 2012 at 01:30 AM
Terri, I don't think all Democrats are bad for Maryland. The only Democrat I ever voted for was William Donald Schaefer. I think he had the city of Baltimore and the state of Maryland's best interest at heart. He believe Shaefer despised O'Malley because of his spendthrift ways. The state of Maryland has be ruined because of MOB, Miller, O'Malley and Bush.
W. L. August 02, 2012 at 01:57 AM
Politicians should only be allowed to campaign one month before their election date. No more trips to kiss babies and shake hands. Give them each two TV hours where they must tell the voters specifically their goals. Have them publish their plans (delivered to libraries or facilities where we can obtain it), stating EXACTLY and SPECIFICALLY what they will do during their term to fix, change, improve, etc. current problems we are experiencing, and again state their goals and how they will achieve them. They are not allowed to do any negative campaigning against their opponents (have to spend their time telling us what THEY will do). No extreme spending allowed (have a cap), so that any credentialed man or woman could run for office, not just the rich or those in the back pockets of corporations. No more collecting millions (unless they want to give it toward educating our children). No more campaign money allowed from large corporations. Eliminate all lobbyists. They can spend the 2 years before that one campaign month (rather than being on the road begging for votes and money), getting their specific information/act together in a format that will be easy for anyone to understand. Then we can vote. I know, it's dumb.
CP Resident August 02, 2012 at 02:26 AM
I've got a few more suggestions for your list: 1) Take party names and incumbencies off of ballots. If you don't know the name of the person you're voting for, you shouldn't be voting. 2) Limit campaigning to a website, and a limited number of pages of printed material at libraries. No ads, no email, no tweeting, no fake grass-roots efforts. Those that make an effort to find out what the candidates stand for should be the only ones voting anyway. Perhaps a televised debate around a month before the elections. Total blackout of campaigning (even by third-party groups) two days before the elections. 3) Term limits. One of the reasons MD is such a mess is that Miller has been running the Senate since 1987, and Bush the HoD since 2003. Miller has overseen three successive redistrictings that put the original "Gerrymander" district to shame. Let them have two elected terms, and then get them out in favor of some fresh blood. Oh, and after they leave office, no more benefits - just like a real job. 4) Hold elections on weekends, all weekend long - Saturday 8am to Sunday 8pm. Require a MD state ID to vote, and make it free to obtain so we don't have any poll tax issues. Get rid of "voter registration" alltogether - let the MVA/issuing agency figure out your eligibility to vote, and put it right on your ID/License. For referendums, require the DL or ID number so authenticity is easy to verify.
jag August 02, 2012 at 03:22 PM
?? Patricia, right, of course we have a military base...just like every other state in the country. My point is clear, feel free to re-read it if you didn't understand it the first time. M. Sullivan, I don't know why you think anyone in MD is "desperate" for a casino. Of course it'd be a nice boon for Nat. Harbor, but obviously it's not going to change the course of history whether MGM comes to the DC area or not. It'd be nice, though. Going to WVa or NJ is a pain.
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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