Column originally published in The Daily Record on May 16, 2014
By Donald C. Fry
Democrat and Republican candidates for governor in the June 24 primary elections are trying hard to communicate their commitments to focusing on Maryland’s business climate and to strengthening our state’s competitiveness for private-sector job growth.
All vow to make job creation a high priority. All have something to say about taxes.
This year, “Jobs, Jobs, Jobs” is the name of the campaign song, but the lyrics vary from candidate to candidate.
Candidates’ business-climate strategies range from proposals by two Republican candidates – Harford County Executive David Craig and Charles County business executive Charles Lollar – to eliminate state income taxes entirely to Democratic Delegate Heather Mizeur’s call to increase taxes on large corporations and high earners and use the new revenue for tax relief to middle-income families and small business employers.
In between those contrasting positions, proposals from Democrats include a vow from Lt. Governor Anthony Brown to create a commission to study tax reform and a proposal from Attorney General Doug Gansler to gradually reduce the corporate income tax rate through annual quarter-percent reductions.
Other proposals from Republican gubernatorial candidates include a call from Anne Arundel Delegate and business owner Ron George for a 10 percent across-the-board personal income tax rate reduction and a pledge to “get the government off our backs” from Larry Hogan, an Anne Arundel business owner and a former member of Governor Robert Ehrlich’s cabinet. All Republican candidates vow to repeal the rain tax.
Following are thumbnail summaries, gleaned primarily from websites, of the most visible candidates’ policy positions related to jobs, taxes and other business climate issues.
- Anthony Brown. In pledging to convene a tax reform commission, Brown envisions “no new taxes” but does not support “giveaway” corporate income tax breaks. He proposes to generate jobs through state infrastructure projects including light rail in Baltimore and the D.C. regions and improvements to the port and airport. Other proposals include a focus on STEM education, creating a center to connect employers to skilled workers, investing in “apprentice academies,” and creating new funding initiatives such as an infrastructure bank and small business loan funds.
- Doug Gansler. Gansler’s plan pledges to “hold the line on tax increases” but close tax “loopholes” for large companies and to implement spending reforms designed to save an estimated $1.5 billion. He proposes to gradually reduce Maryland’s 8.25 corporate income tax rate to 6 percent, equaling Virginia’s rate. Other proposals include job-creation tax incentives for small businesses, discounted college tuition for degree programs in high-demand occupations, establishing a “robust” technical apprenticeship program and accelerating Maryland’s schedule for increasing the minimum wage.
- Heather Mizeur. Mizeur proposes increasing taxes on high-income earners and closing corporate tax “loopholes” to pay for tax relief to middle-class families. She would raise the state’s top income tax rate to 6.5 percent – from 5.75 percent currently – and reduce tax rates for most families earning less than $150,000. She proposes streamlining the regulatory system, increasing job training funding, providing property tax subsidies to small businesses, enacting a “living wage” of $16.70, commercializing academic research and funding infrastructure priorities.
- David Craig. Craig vows to eliminate the income tax over five years and to eliminate the estate tax and the rain tax. He proposes to ultimately reduce the corporate income tax to 4 percent. He also vows “make actual cuts” to the state budget and to reduce the state education department’s administrative budget, pass savings on to local schools, end Common Core, and make tuition at state higher education institutions more affordable.
- Ron George. Besides a 10 percent income tax cut, George proposes to reduce the state’s corporate income tax rate to 5.75 percent by 2017, repeal the rain tax and the gas tax increase and to audit state agencies, eliminating redundant services. He also proposes a lock-box for transportation funding, attracting manufacturing firms to the Baltimore region and luring small manufacturing firms to Maryland’s rural areas.
- Larry Hogan. Hogan supports reducing personal income taxes at all levels, eliminating the rain tax and ensuring that the state’s corporate income tax is “regionally competitive.” He vows to make decisions based on restoring Maryland’s economy through job creation and making it easier for families and job creators to stay in Maryland and for businesses to locate here. He also pledges a more transparent state government.
- Charles Lollar. Lollar vows to immediately reduce the corporate income tax rate to 5 percent and to phase out the state’s individual income tax in five years. He proposes to audit specialty taxes on businesses and to “eliminate as many as possible.” He vows to eliminate the rain tax and create a regulatory climate that allows companies to grow “without hurting the state’s natural resources.”
Granted, these are highly-condensed summaries of candidate positions on business climate issues intended to whet reader interest in visiting candidate websites to learn more.
For a frame of reference, I offer eight core pillars for a good business climate compiled by business leaders from the Greater Baltimore Committee. They are: government that partners with the private sector; a highly-educated workforce that meets business needs; regulatory policies that are streamlined, stable and predictable; a fair and competitive tax structure; competitive costs of doing business; superior transportation infrastructure; effective state investments in business growth; and a coordinated, well-funded and long-term state business marketing strategy.
Virtually everything about our state’s future economy and quality of life rests on the extent to which business and government can agree and act upon policies that promote a competitive business climate.
Maryland is struggling to emerge from a debilitating recession. On the issue of competitiveness, government and the private sector together must get it right.
Donald C. Fry, president & CEO of the Greater Baltimore Committee, writes a monthly column for The Daily Record. His e-mail address is firstname.lastname@example.org.