Franchot: Maryland's Economy on Wrong Track

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.