When I wrote my brief little synopsis on Friday regarding manufacturing, I noted in my promotion that it made me think of former gubernatorial (and future State Senate) candidate Ron George, for whom the most appealing part of his campaign was the emphasis on bringing industry back to Maryland. In response Ron wrote:
Your article is spot on. Note also the companies that are taking their manufacturing jobs out of China and bringing them home to many southern and midwest pro business states. Our Maryland midsize cities need it back.
Governor Larry Hogan needs help by voters in these areas pushing representatives and candidates for low taxes for manufacturing at the state and local level. The increase of the number of new workers paying the payroll tax will itself greatly increase state and local revenues. Keep it up Michael Swartz.
So I decided to revise and extend my remarks. Those of you who have read here awhile probably have a good idea about what I’m going to say, but I do have new readers all the time so a refresher is in order.
I have no doubt that Maryland can compete for businesses large and small once they eliminate the mindset that employers are cash cows to be milked dry for revenue and embrace the thought that their main goal is to be profitable. I definitely show my age and home state bias, but the mantra I grew up with under Ohio Gov. James Rhodes was that “profit is not a dirty word in Ohio” and to get there we wanted people to make things, just as this 1966 advertisement in my hometown newspaper states. Those things Rhodes touted a half-century ago are still valid today for attracting industry – low taxes, financial incentives, a well-trained workforce, and easy transportation. Plus aren’t we the land of pleasant living?
In the first case, Maryland can make a splash at the cost of three cents per dollar of state spending by completely eliminating the corporate tax. Even if it were phased out over a two- or three-year period, the fact that progress is being made should vault Maryland higher on those business-friendliness lists those whose business is to attract business refer to.
As for financial incentives, I’m leery about having the state in the investment business because I don’t believe they should pick winners or losers. At this time, though, they already have the Maryland Venture Fund although it’s geared more toward startups.
Supposedly Maryland has the best educational system in the country, although I’m a little skeptical of that claim based on some of the recent graduates I’ve seen. One thing we need to focus more on, though, is the idea that vocational education can be valued as much as college prep. Maybe Johnny and Susie’s parents think otherwise, but even “A” students sometimes show not all high school students are college material.
But people with the aptitude to run machinery, know how to tinker and fix things, and are good with their hands don’t need a degree from State U to succeed – and oftentimes have the advantage of not being thousands in debt. To be perfectly frank, to succeed in my chosen profession of architecture one should not need a college degree if they are willing to spend several years learning the craft from the bottom up as one of my former employers did. Somehow they have picked up the idea that five to six years of college schooling plus a couple years in an intern development program is the only way to create good architects, and that’s simply not so. This is why money should follow the child, so they can explore the maximum number of educational options out there.
Finally, there’s the aspect of transportation. Maryland is a state in a great location, but in our case on the Eastern Shore we have the lousy luck of a large body of water limiting our ground-based options. We can either go north through a tangle of traffic lights and small towns along U.S. 13 north or go south through a different gauntlet of traffic lights and small towns. Of course, any improvement to that situation requires the assistance of Delaware or Virginia.
Yet the alternative of going west remains with a third Bay Bridge span. Environmentalists can stop reading after this sentence because I will give them a stroke over the next paragraph – just pick it back up two grafs down.
To me, the best place for a third span runs between Dorchester and Calvert counties, southwest of Cambridge along Maryland Route 16. Obviously roadway improvements would need to be made, but imagine the ease it would bring for traveling between Southern Maryland and the Eastern Shore. No longer would it be an arduous three-hour journey to travel perhaps 50 to 60 miles west as the crow flies. Would it go through some environmentally fragile areas? Yes. But I believe the benefits would outweigh the costs.
I know people will complain that bringing industrial development to Maryland in general and the Eastern Shore in particular would ruin the rural lifestyle, but lifestyle is what you make of it. The carrying capacity of the Delmarva Penninsula is probably at least double its population; a number that will increase with advancements in technology. Regardless, we are nowhere near the density of the I-95 corridor and that should remain the case for the foreseeable future.
I’ve often said that if an area doesn’t grow, it dies. I used to use North Dakota as my poster child for this until they got an energy boom and began attracting people seeking work in a lucrative field. While Maryland can get some benefits from doing the same and allowing fracking, perhaps the best way to make their mark is to adopt the old Ohio mantra that profit is indeed not a dirty word and take the bold steps needed to shake its anti-business reputation.
To enjoy the land of pleasant living, you have to be able to make one.
It’s been a crusade of mine to encourage the rebirth of American manufacturing – unfortunately, we seem to be going the wrong way, according to the union-backed Alliance for American Manufacturing. Holding Barack Obama to his promise for one million new manufacturing jobs in his second term, the net gain has fallen with the September employment results and the August revision to 370,000. Even if you consider that their figure is a net figure, we’re still way short of one million jobs created.
Overall, the job market is creating about 200,000 jobs per month – slower than last year, but still positive growth. Unfortunately, it’s barely exceeding population growth.
You may ask yourself, though – why the emphasis on manufacturing in these quarters, particularly when you work in a service industry? To me, the answer is simple: economic growth is achieved when we add value to the overall economy. Sure, you can print money until the printing presses break but that just adds paper and not value.
Consider the iPad I’m writing this on. Originally it was a number of raw materials extracted from the ground. The first addition of value came when they were extracted, but a far larger one came when the component parts were created. A further increase in value came from the assembly process, which made the iPad into something usable by a member of the public. At that point, a little extra was added in shipping it to the venue of retail.
While I can’t ascertain where the raw materials came from, the iPad is manufactured overseas and shipped to the American market. Supposedly Apple has moved some production here, but not for iPads.
I don’t want to get bogged down in those nuts-and-bolts, but suffice to say that I think manufacturing adds more value per dollar invested than service industries. Certainly it can be fickle – the fanfare associated with this early ’70s plant expansion died quickly when a national recession shuttered it within a couple years – but more often than not good jobs are provided.
We are better off when we make stuff. China may be cheaper, but is it better? How many times have you purchased some Chinese-made trinket only to scrap it in a couple years because it was assembled in a shoddy manner with substandard parts? America used to be better than that, and I want to see us return there.
It wasn’t the meeting we expected, but still turned out to be informative.
We had scheduled State’s Attorney Matt Maciarello to be our speaker, but with a pending trial Matt needed to burn a little midnight oil. So we were left with some reports instead. As one member put it, having members of several local groups meant we could always have an interesting meeting.
So once we took care of the usual opening business, we got a Central Committee report from Ann Suthowski. She reminded us the Lincoln Day Dinner was slated for November 7. When asked why it was so late in the year, Dave Parker noted it was originally planned that way to attempt to get Governor Hogan to speak, but his ongoing cancer treatments thwarted that idea. However, since Lieutenant Governor Boyd Rutherford has a daughter who attends Salisbury University, it was hoped he may appear. Suthowski wondered if he was being considered as a commencement speaker since his daughter would be graduating this year.
Suthowski also revealed there was an opening on the Central Committee, with Parker adding action to fill the vacancy could occur as soon as their next meeting October 5.
Bunky Luffman, speaking on Delegate Carl Anderton’s behalf, announced he would hold an event Thursday evening at Evolution Brewing. It was to celebrate the first day of the “Evo Bill” that allowed Wicomico County breweries such as Evolution and Tall Tales to double their output yet keep their particular licenses.
Anderton is also planning a anniversary celebration November 4, said Luffman. When he won his initial election last year, the results weren’t official until late in the evening so they wanted to have a more proper celebration for his supporters.
As part of his own campaign, Muir Boda is getting some help from around the state with a Super Saturday planned for October 17. He’ll get assistance from various volunteers from the state party and Maryland Young Republicans.
On the We Decide Wicomico front (the grassroots effort to secure an elected Board of Education) Dave Snyder reviewed the first two public hearings, the second of which in Delmar had a “pitiful” turnout, according to another observer who was there. Nevertheless, they were pressing on for the third which was held tonight at First Baptist Church. (I’ll have some observations on that tomorrow.) Snyder also added he sought to speak to the local PTAs but was turned down until such time when a referendum was on the ballot.
When asked about media, the feeling among several members was that the Daily Times was doing “nothing” but the Independent was doing a good job pushing it. The hearings are also taped for broadcast on the local access channel PAC14.
County Councilman Marc Kilmer opined that a hybrid vs. elected question can be on the ballot. But Don Coffin cautioned that we should “keep it simple,” adding “our country was founded to have elected officials.” Dave Parker added that we needed a provision for replacing members as well. “I want the best people,” said Parker.
But Kilmer pointed out this “has to be acceptable to the majority of legislators in Annapolis.” It was also revealed by Bunky Luffman that there was no precedent for a three-way referendum such as an appointed vs. hybrid vs. elected would be. We were also told that Wicomico’s legislation last year was modeled on a version Prince George’s County used.
Turning to the Crab Feast, it was no surprise that the poor weather soaked the bottom line, Attendance and silent auction proceeds were down markedly from 2014, which was the run up to the election. One suggestion made for next year was to get a better sound system so people at the outside tables could hear.
I then discussed the upcoming Good Beer and Autumn Wine festivals, and we broached the idea of getting our Christmas Party organized.
Before we left, we learned from Joe Ollinger that the school board was working on a search for a new superintendent and wanted to finish by next March. There was also the news that the school system was being investigated by the Justice Department for disparity of discipline.
The next meeting will be October 26.
Facing his final few months as Salisbury’s mayor, Jim Ireton decided to be Santa Claus. You know the old adage about a democracy lasting until the people figuring out how they can vote themselves a piece of the treasury? This is really a proposal for the 2018 Ireton campaign.
In a Facebook posting, the mayor explained his reasoning.
Today I announced that I will forward to the City Council a Rent Stabilization Initiative aimed at bringing rents in Salisbury into line with national averages. This is a common sense step which will have very real results for residents who find themselves living paycheck-to-paycheck, struggling to make unnecessarily exorbitant rent payments. I was asked by someone earlier today “Why now?”
- 59% of renting households are cost burdened, and 36% of households are severely cost burdened, i.e. paying 50% or more. This means that over 1,600 Salisbury households are paying between 30% and 50% of their income for rental housing costs, and an additional 2,700 households are paying over 50% of their income for rental costs.
- The lack of affordable housing in Salisbury has a quantifiable negative impact on our local economy. High cost burden means households are spending less on food, transportation, health care, and apparel, while accruing little-to-no wealth. If housing was affordable for all renting households, an additional eight million dollars a year would make its way back into the local economy.
- From 2000-2008 rents rose dramatically, over taking the national average, as a result of increased energy costs and a doubling of the average home price.
If we want and expect to do better for the people in this City who are hurting the most, then we cannot shrink from this tough discussion -and I can tell you that I won’t. Our residents pay far too much for the quality of the rentals that they live in, and far too many of them are severely cost-burdened. In the end, renters know when they are paying too much in rent; it’s when there’s no money left on the 2nd of the month. We have tried endlessly for 30 years to address the problem of the greed of the rental industry in Salisbury. This Rent Stabilization Program is good for our residents, good for the local economy, and will allow the City to get a return on the investment it makes in its citizens.
It’s small wonder that there’s a chorus of renters who agree. They think they are getting something for nothing but what they will get are fewer choices or more substandard dwellings.
But let’s look at some of these claims. Ireton says that a large percentage of renting households are overburdened. However, his proposal only addresses individual houses, not multi-family dwellings, so only some portion of the population would benefit. We aren’t given the number who would actually be affected.
And I still can’t quite wrap my head around how additional money makes it into the local economy, because it’s not really additional money. The renters aren’t making any additional money on the deal. Granted, they may gain some choice on where to spend it but this is pretty much a zero-sum game.
Ireton is playing the old class envy card here, pitting poor, struggling renters against a class of businesses his allies derisively refer to as “slumlords.” It’s a convenient target to evoke sympathy, but one tends to forget that these businesses and individual homeowners are also investors in the community. The $8 million the renters save isn’t just sitting in their pockets – they are paying workers to oversee their properties, spending money on upkeep, or, as individual homeowners who depend on rental income, they buy food, transportation, health care, and apparel too.
Let’s imagine for a moment that this initiative passes – and given the current composition of City Council I could see three votes to make it happen. What incentive is there for people to invest in housing if the return is arbitrarily limited by the assessed value of the house, something that’s determined on a triennial basis? Once a house is maxed out on rent, in effect the price is frozen for the remainder of the three years unless the city benevolently changes the formula.
In the meantime, the decrease in money coming in makes investment less worthwhile, so housing prices will sag. Arguably that’s good for renters who may want to purchase a house, but the house they get may not be in as good of repair as it could have been because less money came in to make repairs, just the essentials to keep it up to code. It’s the small mom-and-pop investor businesses which would be hurt the most by this law because the rental companies can increase the rent on those dwellings they own outside the city limits.
The solution for homeowners may be that of subdividing larger houses into apartments where possible. Certainly that’s not an elegant solution and I suspect the various housing boards may look a lot more severely at these efforts because it’s a way of skirting a bad law.
It’s just the latest chapter in the Ireton war on landlords. He may think he can bring Salisbury up from poverty but instead it will just change the distribution of wealth slightly, eventually make affordable housing more scarce, and discourage investment – or, as Ireton calls it, “greed.”
My friend Muir Boda has his own thoughts on the process, and notes that College Park dropped its program a couple years ago. I agree with his main point, though: instead of using government to bring one class down in the attempt to raise another, why not try to add value by attracting the kind of economic development which can make fewer households “cost burdened.”
Perhaps that should have been Ireton’s plan all along.
For several years I have cited an annual survey of business friendliness put together by thumbtack.com. It was useful in illustrating how poor the Maryland business climate was.
Unfortunately, year one of the Hogan administration finds the state in a deeper hole, narrowly missing the bottom five of the 36 states for which the survey had sufficient data to compile. It is noteworthy, however, to point out Baltimore’s grade basically drove the state grade so they may bear a significant share of the blame.
As for what the survey asked and found specifically:
Small business owners found Maryland to be one of the least friendly states for microenterprise, though they widely approved of local training opportunities, according to Thumbtack’s annual Small Business Friendliness Survey.
Nearly 18,000 U.S. small business owners responded to the survey, including 442 in Maryland. The study asked respondents to rate their state and city governments across a broad range of policy factors. Thumbtack then evaluated states and cities against one another along more than a dozen metrics.
“Small business owners on Thumbtack have consistently told us that they welcome support from their governments but are frequently frustrated by unnecessary bureaucratic obstacles,” said Jon Lieber, Chief Economist of Thumbtack. “Maryland offers decent programs to support business owners directly, but they tell us the regulatory environment is just too hard for them to understand and navigate.”
“The taxes here are high,” commented a property manager in Baltimore. “There is no support from the government, especially the housing office.”
Here’s where entrepreneurs will pin their hopes on the new Regulatory Review Commission, which should try and reach out to as many of these businesses as possible to get suggestions.
The biggest problems with our state insofar as this subject goes is that its grade is getting worse – declining from a C- last year to its D+ this time – and Virginia got an A on the same survey. (Delaware had fewer than the 50 responses needed to get a grade.) Business owners hated the state in particular for its environmental and zoning regulations and government friendliness, both of which were given big fat Fs from those surveyed. (The former category also gets a “see, now what have I been telling you for the better part of a decade” from this writer.)
If a state is going to brag that it’s “open for business” it needs to be better than a D+ state. The work on regulatory reform should be in tandem with other avenues toward success like lowering the corporate tax rate (or, even better, figuring out a way to cut three cents out of every dollar in state spending and scrapping it entirely) and telling the liberals in Annapolis who keep whining about the need for combined reporting to pound sand. Another proposal I would have is adoping the proposed moratorium on new Chesapeake Bay regulations until the sediment at Conowingo Dam is addressed,
We have models for success all around the country so why should we be 31st out of 36? I can’t fault Larry Hogan for a lack of effort or his difficult circumstances, but we need leadership in this regard and if it means telling the people the truth about where the problems lie (hint: they hold 124 seats in the General Assembly) so be it.
It was via a roundabout route, but we finally heard from the man who’s presumptively Salisbury’s next mayor, Jake Day. Because Jake had another place to be this evening – the Salisbury City Council meeting that he ran as their president – we had a succession of speakers to fill the time. It was interesting to note that several of these speakers dropped in as our meeting was going on, which told me they were looking forward to hearing what Jake had to say.
But we began as we always do, with the Lord’s Prayer, Pledge of Allegiance, and introduction of distinguished guests, all done by our first vice-president Muir Boda, who filled in for our under-the-weather president Shawn Jester. We then did the swearing in of new second vice-president Dave Snyder, who pledged to be “a very good listener” and work to recruit 100 new GOP voters and new club members.
I took a little time to thank people for helping out at the Wicomico County Fair, as did Dave. My one suggestion was to perhaps look into a spot for outside next year.
In a Central Committee report, Mark McIver called the elected school board “one of the biggest things on our plate.” He added there was a new initiative called “We Decide” that was a non-partisan group to back an all-elected school board, and related the urging from County Council that we should participate in these hearings. It was going to be “an 8-week push.”
Mark Edney added his two cents, informing us that there will be an initiative this fall to address the issue of vacancies in the General Assembly through the state party’s bylaws. Noting the issues faced by Carroll County, Edney intoned that it was “important that we get this right” because members of both parties in the General Assembly sought to take away the power local Central Committees had to choose successors.
Joe Ollinger updated us on the Crab Feast, which had most of the items in place except a silent auction coordinator. It’s still on schedule for September 12 at Schumaker Park.
Speaking of food, Muir Boda announced his own, more modest event this Saturday at Doverdale Park. His community barbecue was slated for 3-5 p.m. but volunteers could show up at 2:00. Boda remarked he had three opponents in the election, so getting out the vote was paramount.
He also commented that the proposed city curfew was a “big issue” but questioned whether it would be enforceable given current resources and the spread-out geography of Salisbury. By itself, a curfew “won’t solve youth crime,” Muir said.
Senator Addie Eckardt, who had arrived after we began, spoke briefly about her upcoming annual bike ride through the district that will cover Wicomico County on Thursday. She also praised Governor Hogan, who has “put a great team together.” It would help government become, as she put it, more responsive and cost-effective.
Delegate Christopher Adams remarked about his attendance at the defund Planned Parenthood rally in Easton as well as a stop last week at Wallops Island in Virginia. They were expecting to resume launches at the pad damaged in an explosion last fall by March, he said.
Looking forward, though, he wanted to concentrate on regulatory reform, as some needed changes could be done more easily through that avenue than through the legislative process.
Fellow Delegate Johnny Mautz predicted “a really busy session” next year but expressed his disappointment in getting a low 25% score from the League of Conservation Voters. I looked up the floor votes they scored: two were anti-fracking measures and the other was the “repeal” of the rain tax sponsored by Mike Miller. So pro-business was not going to meet pro-environmnet with the LCV.
Bunky Luffman stood in for Delegate Carl Anderton, commenting to an earlier point made about regulation by bringing up the sprinkler mandate that is halting construction locally. One local developer lost a builder who refused to build more dwellings – they weren’t able to make money with the mandate and additional costs.
Most of the legislators had come late to hear Jake Day, who spoke for about 15 minutes and answered questions for another 20. Apologizing both for being late and a lack of sleep as a new dad, Day told us he was “very excited” about becoming mayor. As a Council member he was pursuing a pro-business agenda, but noted “I have found a roadblock in the current administration.” Like the state of Maryland, his effort would be to attract business: “I want us to be competitive,” said Day, citing Delaware under Jack Markell as a “more friendly and welcoming environment.” Perdue’s decision to move some of its corporate operations to Delaware “sent a message,” said Jake. “The economy will be first and foremost on my mind each day.” His idea was to grow jobs “locally and organically,”
One area he saw as a job creator was downtown, for which revitalization was important to Jake. It’s “part of the renaissance” of Salisbury, said Day. He criticized the “lack of active leadership from the top” and sought a City Council that was cordial, but aggressive. He also announced the intention to continue divesting the city’s surface parking lots, believing successful downtowns do better with infill rather than surface parking.
Crime was another top issue. Day observed that criminal activity was starting at a younger and younger age, so the city could have to “pick up where the parents left off.”
It was an enlightening address, but the questions were good, too. The first one out of the chute was about the “rain tax.” Jake disagreed with the state mandate, but believed it was necessary for a city which had ignored the issue for over a century. He was willing, though, to reduce property tax rates and scrap the city’s inventory tax to help even things out.
And when I asked why the city couldn’t use its water and sewer fund surplus, Day said the surplus was being depleted too quickly. Basically the relief would be short-term at best.
Corollary to that initial question was a discussion about the closing of Labinal, which will cost the city hundreds of jobs. While the popular opinion was that the state’s difficult business climate drove them away, Day said the answer was more simple: Texas (and Mexico) were closer to their main customer base, and Salisbury mainly served military clients whose contracts were winding down.
A second concern was the issue with fire service. Rather than the “big mistake” of giving ultimatums through the media, Jake was working closely with county officials in coming up with a long-term solution. He conceded it probably wouldn’t be all the city wanted, but noted that he and County Executive Bob Culver were “working well together.” The key was making things more fair in a way that doesn’t alienate non-city residents.
Our wastewater treatment plant was the subject of a question. Calling its saga “a scar on Salisbury’s history,” Day announced the next phase of renovations would begin in October. Bunky Luffman, who formerly worked at the plant, pointed out it had reduced the amounts of nitrogen and phosphorou, but not enough to meet more stringent state standards that changed midstream.
A final questioner tested Day on his “number one challenge – is my (business) location safe?” Crime was a concern for local businesses, and “a lot of solutions to our challenges are economic,” Jake said. He vowed to show leadership and compile more data on the current conditions.
We finally let Jake go, so that Boda could announce our next meeting would be September 28. Hopefully it will be as chock-full of information as this one was.
Donald Trump took a lot of criticism from all sides last night, so this little bit of piling on won’t make much of a dent in his self-esteem. But Scott Paul of the Alliance for American Manufacturing found another reason to diss on The Donald:
Love him or hate him, Donald Trump is never shy in front of the camera, and his appearance at tonight’s first big GOP presidential debate will be must-see TV – especially because he takes a hard line on unfair trade with China.
Here’s one question I’d love to hear him answer: Why aren’t any of his Trump-branded goods made in America?
During his campaign announcement speech and plenty of times since on the stump, Donald Trump has blamed China and Mexico for the loss of American manufacturing jobs. But, again, his own Trump-branded stuff is made overseas.
Trump certainly talks tough on China, jobs, and trade, but he doesn’t back it up with his own actions – while many manufacturers fight to Make it in America in spite of the odds.
I don’t believe Scott Paul is related to Rand, by the way. But this Paul’s statement is actually a valid point to make, particularly when Trump makes a loser out of America by manufacturing his goods elsewhere.
The AAM has also vowed to check on the other candidates as well, although they seem to be a bit behind. One notable omission on the Democratic side is Martin O’Malley. I did a cursory check of his website, though, and found he has no merchandise store. (Now I feel like I need a shower, though.)
When there are millions of dollars flowing through a campaign, there shouldn’t be a question about making the goods in America where possible. Given the fact most campaign merchandise comes from the apparel and printing industry it should not be hard to find these items. (Surely my old friends at American Certified can help with that.) Naturally Democrats prefer to have all their items come from union shops, while Republicans have their own list of favored suppliers. On a local level, we know which businesses are owned by Republicans so we try and steer business their way.
Like it or not, political campaigns are a multi-billion dollar business – especially on the Presidential level. So why not keep that money flowing in American hands? Hopefully the Alliance for American Manufacturing will be pleased with the level of American products they find in the various campaigns.
It also reminds me to plug my dossier series, as trade and job creation is next on the schedule. I am shooting for early next week with that one.
I harbor no illusions that my post from the other day regarding the declining optimism of Maryland business owners goaded him into action, but today Governor Hogan announced the formation of a Regulatory Review Commission (RRC), charged over the next three years with “(f)ixing our burdensome antiquated, broken and out-of-control regulatory environment in Maryland.” The ten members of the RRC are volunteering their time to “focus like a laser beam on these issues”, said Hogan.
It’s interesting that the Democrats are claiming the Augustine Commission (which was created in the waning months of Martin O’Malley’s second term) was intended to address these issues and saying Hogan shouldn’t need three years to address the problem. How soon they forget that Larry’s Change Maryland organization was convening business summits over the last three years to gain the business perspective, not to mention the fact it was their administration which put out a number of these job-strangling regulations in the first place.
To me it’s just sour grapes. Ask yourself: had Anthony Brown won, would curtailing regulations be a priority? Thought not. The Augustine Commission report would have been filed and ignored.
But I hope the RRC has the latitude to go beyond just regulations and into other areas like taxation and, more importantly, looking into where other states succeed. Take a state like Texas, where hundreds of thousands of jobs have been created (as a net gain over jobs lost, not as a one-for-one swap) over the last decade. What attracts these entrepreneurs and leaders, and what assets can Maryland use to emulate their gains? Granted, a good portion of the Lone Star State’s gain came from abundant energy resources that Maryland can’t match, but there are other areas we may be able to do as well or better if we make that a goal. Unfortunately, over the last eight years our state took its cues from states like California and New York, places where capital and population have been fleeing.
Another question is just how cooperative these Democrats, who are already trying to take credit for the little bit done in 2015, will be to the RRC’s agenda as they submit their findings.
Take the “rain tax” as an example – a Democrat introduced the vastly watered-down bill that eventually passed, so they will surely henceforth try and take credit for ending the “rain tax.” But the mandate for affected counties to have a watershed protection and restoration fund did not go away (page 4 here) – it’s just up to the county to fill it, and most will likely retain some version of the “rain tax.” The actual repeal of the “rain tax” on this Hogan-sponsored bill was killed in committee by the Democrats therein on a straight party-line vote. (I used that vote as one of the committee votes on the monoblogue Accountability Project.) So it’s a fairly safe bet the Democrats are only paying lip service to the issue of regulations now because to them more is better – that’s how they’ve run Annapolis for most of the decade I’ve lived here and probably my whole life before that.
So the RRC can’t just exist in a vacuum. Now that Larry Hogan has experienced the way Democrats in the General Assembly basically gave the finger to his mandate, he will need in the coming months and years to take a page from the Reagan handbook and go straight to the people. Democrats may claim the last election was about “divided government” but the motivation was clearly behind a more conservative direction for the state.
While I would have preferred a more rapid formation for the RRC, this is a definite feather in the cap for Larry Hogan. Let’s hope that it’s not just for show but instead gives us an agenda even the Democrats can’t stop.
It’s only one survey of 280 small (perhaps micro-scale) businesses in Maryland, but a recent poll conducted by a company which should be familiar to regular readers calls into question the effectiveness of Larry Hogan’s efforts at improvement in Maryland’s business climate in his first few months in office.
In cooperation with the Kauffman Foundation, Thumbtack.com has done annual, quarterly, and now monthly surveys of small business sentiment around the country. (I’ve written about their surveys on business friendliness in the past.) While it comes in a more graphical form than I can readily share here, some items I gleaned from the most recent Maryland and national data follow:
- In terms of revenue and overall financial outlooks, Maryland businesses are less positive than the rest of the nation in the former and fall right at the national mean for the latter. The good news, though, is that over 70% of these businesses have a positive outlook over the next quarter.
- Less than half, however, rate their financial situation as “very good” or “somewhat good.” Maryland’s total is 45.9% compared to 48.1% nationwide.
- Maryland businesses are more pessimistic about profitability than their national peers; still, over 60% think they will do better. On the other hand, their perception on business conditions is actually better than the national average – 53.4% in Maryland think they will be better in three months’ time, while only 51.9% nationally share that outlook.
- Finally, 24% of Maryland micro-businesses anticipate hiring over the next three months, while just 22.1% do nationwide. But while only 2.1% of businesses nationwide thought they would need to furlough workers, that percentage was 2.5% in Maryland.
As I noted above, this data was compiled at different intervals. Until March, this was done as a quarterly survey; now it is monthly. But one asset of this approach is that I can go back to the beginning of the year, and in their release accompanying the information Thumbtack.com noted:
In June, respondents nationwide indicated reduced optimism about the economy for the third month in a row, though sentiment about current and future conditions continues to be higher than that reported one year ago.
Key findings for Maryland include:
- Maryland small businesses reported a sharp decline across each of the metrics tracked by Thumbtack, with the strongest declines coming in their expectations about future financial conditions and the economy.
- Maryland experienced one of the largest overall business sentiment declines in the country in June; the state is now below the regional and national averages for small-business sentiment and ranks 30th overall nationwide.
- Sentiment is still higher than it was one year ago, reflecting a broad-based increase in perceptions of economic conditions by small businesses across the country.
- For the second month in a row, small businesses nationally expressed increasing pessimism about future economic conditions, which have been the largest contributors to the decline in overall sentiment.
Thus, it sounds like Maryland is reflective of a national trend.
But it’s also worth noting that the 2015Q1 survey showed broadly higher numbers across the board – revenue outlook has declined 10.9 points, financial outlook 5.2 points, profitability 11 points, and business conditions 8 points.
In addition, those who thought they may be hiring declined from 26% to 24.1%. Only the respondents’ assessment of their financial condition stayed relatively unchanged, declining just 1/10 of a point.
Unfortunately, these were the types of numbers we came to expect in the O’Malley administration. Obviously Hogan apologists would argue that their guy has been in office less than six months and it takes time to turn the ship of state around. And they would be correct, as the Augustine Commission agenda sailed through the General Assembly with its effective date in October.
Yet to me much of that was a simple rearrangement of deck chairs on the Titanic. While we can’t do a whole lot about the national economic climate, one thing Maryland could have done was allow these entrepreneurs to keep a little more of their money by reducing personal income tax rates; meanwhile, they could accommodate the entire elimination of corporate taxes with modest budget cuts of 3% or less. (The corporate tax brings in just over $1 billion of a $40 billion budget.) This would encourage larger businesses to consider Maryland for their growth and create more spinoff work for these micro-businesses.
Think of it this way under my scenario – Justin relocates from New York to work at the new Maryland corporate headquarters of XYZ Company, which was attracted here by the zero corporate tax rate as well as the other benefits Maryland brings. He needs a guy to fix his laptop, someone to watch the kids while Justin and Mrs. Justin are at work, and so on and so forth. Imagine what 250 Justins can do for a community and how many extra jobs they create. (I’m sure someone somewhere has done a study on this but today I’ll work without a net.)
The point is that addressing regulation and red tape is great, but the financial incentive has to be there as well. Among states with flat corporate tax rates, Maryland ranks among the highest. On a personal income level, Maryland’s rates appear to be a little better but that doesn’t add in the local county tax. (Granted, other states may also have the same practice.)
Let’s just say this: with an agenda that includes financial incentives as well as some cooperation from thoughtful Democrats in the Maryland General Assembly, by this time next year we can have a far more optimistic business community and in a few months after that they can better enjoy the results of hard work because the state takes a smaller cut.
Yesterday I posted on Third Friday, a monthly event that’s become so successful that it spawned a similar spin-off called First Saturday and may have pushed downtown redevelopment over the hump. Similarly, there are some new businesses and apartments going up on the northern edge of the city along U.S. 13, and even the venerable Centre of Salisbury – venerable as a 27-year-old mall can be, I suppose – has the promise of something Salisbury has longed for, a Cracker Barrel restaurant. It’s slated to be built in the parking lot outside the abandoned J.C. Penney store. (Shoot, I was happy when Buffalo Wild Wings finally made it here from Ohio.)
But there is one prime area that has all the ingredients needed for success – plenty of traffic, good visibility, and reliable city utilities. Yet it sits vacant and unused because its plans for development came along at a bad time.
Several years ago, before my unplanned exile from the building industry, I helped draw up a proposed project which would have established a third attraction for Salisbury. Obviously we know the Centre of Salisbury was a retail destination point and at the time the downtown area was being discussed as something which, as it turns out, it is in the process of becoming – a place where visual and performing arts serves as the draw, along with a handful of local eateries.
But the plot of land just south of Perdue Stadium had its own node, with a guaranteed gathering of anywhere from 500 hardy, weather-tested souls to overflow crowds of over 8,000 people 60 to 65 times a year during the spring and summer. Add in the thousands of travelers driving by and there was the potential for a destination of its own; close enough to the beach to be a viable alternative for budget-concious travelers looking for something with a slower pace, yet with the attractions to enjoy a summer evening without the need for driving around.
As originally envisioned, the development had several key elements for success: office space for workday usage, restaurants for both travelers and those seeking a place to have a business or casual lunch, and lodging for those who wanted to have an anchor point to explore the area yet not have to deal with beach crowds. Its misfortune was beginning the development process at a time when we were entering the Great Recession of 2007-whenever. (Some may argue the area is still in one based on employment numbers.)
One other proposal envisioned for the site was the construction of a new Civic Center on the opposite side of the Perdue Stadium parking lot. Besides the obvious plentiful parking available, a new Civic Center would have the advantages of making beer sales at events possible (a deed restriction for the property of the current Wicomico Youth and Civic Center prohibits alcohol sales as a condition of having it donated to the county for its use) and could be configured for more seating than the current arena to attract larger acts.
Any action on that, however, is several years to a decade away. Yet the county is putting money into 20-year-old Perdue Stadium and the owners of the Delmarva Shorebirds are committing themselves to another two decades as the station’s prime tenant. In short, the main attractions aren’t going anywhere.
Yet this valuable land sits as a part of Salisbury time and economics seemingly forgot.
I understand the emphasis our city fathers have placed on revitalizing downtown and trying to make it a close-by gathering place for both young professionals and Salisbury University students. With a transit system already in place to ferry students from campus to downtown several nights a week and grand plans to spruce up the Business Route 13 corridor from SU to the east edge of downtown, city visionaries and elected officials have it covered. Meanwhile, the part of town encompassing the Centre of Salisbury up toward Delmar seems to be doing just fine although admittedly some of that retail may be getting long in the tooth and due for upgrades. The closing of J.C. Penney was just another pockmark on a facility which may need its own transformation in the next decade lest it suffer the fate of the old Salisbury Mall it replaced.
But that rebirth can be set on the back burner for now. Downtown development may be the place where the cool kids go, but there are other assets Salisbury can put in play with the proper foresight and investment. Imagine what could be there now if things had proceeded a decade ago, and work to make it a reality in the next few years. The infrastructure is already there thanks to the aborted previous plans, so let’s get this diamond in the rough to shine.
A couple weeks ago I pointed out that about two dozen bills passed by the Maryland General Assembly this year were still pending after Larry Hogan had his final bill signing session May 12. Here was the list of bills I urged him to veto:
- House Bill 51 (Circuit Court fees)
- House Bill 54 (Circuit Court fees)
- House Bill 345 (flexible leave)
- House Bill 449/Senate Bill 409 (fracking regulations)
- House Bill 838/Senate Bill 416 (mandated IVF coverage)
- House Bill 862/Senate Bill 743 (birth certificates)
- House Bill 980/Senate Bill 340 (ex-felons voting)
- Senate Bill 190 (travel tax)
If he wishes to let the decriminalization of marijuana become law without his signature, that’s quite all right.
So I’m very disappointed to report that the deadline came and went while Hogan was away in Asia, and only two of those bills were properly vetoed: HB980/SB340 and SB190.
Yet while he turned aside the travel tax, Governor Hogan increased a number of court fees and kept an additional O’Malley fee increase scheduled to sunset this year for another five years.
The governor who claims to be business-friendly and who wanted to create jobs went against the wishes of his party on flexible leave and thwarted the introduction of fracking to Maryland for another two years. This after announcing during the campaign:
States throughout the country have been developing their natural gas resources safely and efficiently for decades. I am concerned that there has been a knee-jerk reaction against any new energy production.
Now we have our own knee-jerk reaction.
He also added yet another unnecessary mandate to health insurance with in-vitro fertilization coverage for same-sex couples, and if Bruce, uh, “Caitlyn” Jenner were born in Maryland s/he could legally have his/her birth certificate changed to reflect the “fact” he bills himself as a female.
Perhaps you believe Hogan was making the political calculation about whether a veto could be sustained. With the Senate in Democratic hands by a hefty 33-14 count, it’s not likely a veto could be sustained there. However, a 50-seat group of Republicans in the House only need seven Democrats to keep a veto in play, and given enough political pressure there are still a handful of centrist Democrats who could go along with the governor.
These were the House votes on the eight measures I advocated a veto for. I’m also adding the votes on the handful of bills he vetoed for policy reasons.
- House Bill 51 passed the House 97-40. It would have difficult to uphold this one.
- House Bill 54 passed the House 82-58, after originally failing on third reading. This veto could have been sustained.
- House Bill 345 passed the House 86-52. This one was right on the cusp of a maintaining the veto; definitely doable.
- House Bill 449 passed the House 93-45, and its crossfiled SB409 passed 103-36. But if Governor Hogan had vetoed this and put the whip to his department heads to come up with regulations by next January they may have upheld this veto.
- The margins on HB838/SB416 were 94-44 and 93-45, respectively. That’s iffy but the onus should have been placed on the General Assembly to vote on it again.
- Similarly, HB862/SB743 only won the House by margins of 85-50 and 91-49. Still unlikely to hold, but should have made them vote again.
- HB980/SB340 only had 82 votes apiece in the House, which makes these good candidates to be upheld.
- SB190 only passed 84-56, which means it’s also a good possibility to be sustained.
- SB517, which decriminalized marijuana possession but was vetoed, is right on the cusp of overturn as it passed 83-53.
- Similarly, SB528, which dealt with seizure and forfeiture (also vetoed), passed the House 89-51 so it’s also a possible overturn.
I suppose I should be happy with the half a loaf I have received from Governor Hogan considering the absolute disaster we’ve had to endure under eight years of Martin O’Malley. But the leftists are crowing about the fracking ban, and see it as just an initial step to a permanent halt.
The only way to curb an ambitious, leftist agenda is to put up a conservative one of your own and stomp out any attempt to sneak things through. Instead, what we are receiving is a leftward drift in lieu of pedal-to-the-metal liberalism. However, to borrow the words of a former governor, we really need to turn this car around and not using the veto pen as much as it should be won’t get us going in the correct direction.
Rumor has it that he’s going out the door by not standing for re-election as mayor, but if this is so Salisbury Mayor Jim Ireton is declaring war on private property as his swan song.
On Monday, according to a press release from his office, Ireton will set the wheels in motion to eliminate the non-conforming “4 to 3″ or “4 to 4″ properties in the city, with the stated goal that all housing units in the city will either have no more than two non-related occupants or be single-family housing. Approximately 400 households in the city would be affected.
Ireton is also looking to hire a Community Development Specialist, with the stated goal for this new position being “someone who can identify funding sources, and coordinate with the various agencies involved to shepherd properties through the tax sale process.” That last part is interesting because it brings me to my main point: it looks to me like the city wants to become a much larger landowner. To wit:
According to Salisbury’s Vacant Building Registry, there are 187 vacant and/or abandoned houses within City limits. The effect of these properties on their surrounding communities is demonstrably negative, causing losses in neighborhood property values, increases in crime and vagrancy, and public health concerns. The proposed budget amendment would set aside $45,000 for a fund which the City would use expressly to purchase vacant and abandoned homes at tax sale. Starting in FY2016, an additional $500,000 in bonded debt would be earmarked for acquisition, rehabilitation, repurposing, demolition, and legal fees. Homes bought by the City would be determined to be either eligible for donation to Habitat for Humanity or Salisbury Neighborhood Housing Service, or unfit for rehabilitation and demolished.
Imagine if you will an entrepreneur suddenly deciding to go out a purchase a whole bunch of houses at a tax sale, and the hoops this owner would have to jump through to secure all the permits, inspections, and other hassles a prospective investor would endure because the wheels of city government move so slowly. It’s a climate that discourages investment, so oftentimes properties sit vacant or abandoned. Factor in the difficult economic times of the last several years and there’s no question that too many people believe investing in Salisbury would be a losing cause.
So instead of addressing the situation of why investment is such a risk, the city will go into the business of home ownership. Not only that, they plan on running up plenty of debt to get themselves into a position to decide whether to renovate or tear down these dwellings.
It seems to me the better use of tax dollars would be to take care of what they do own. For example, I live across from a city park that is essentially an empty, semi-wooded lot with one lonely basketball hoop in the middle of it. For a few thousand dollars they could perhaps install a walking path, nice flower beds, and perhaps a couple trash receptacles. It’s not a large space, but it is a focal point of this little neighborhood.
If you believe the rumors that Jim is going to try and trade places with Jake Day, this isn’t the way to do it. Six years ago, we were promised that “help is on the way” but this isn’t going to be much help in making Salisbury an attractive place in which to invest. Why take a chance on buying a house when your next door neighbor could be a property owned by the city?