Last October, former Maryland Gov. Marvin Mandel and Ambassador Ellen Sauerbrey, co-chairmen of Maryland Business for Responsive Government, warned about the “anti-business climate” in Annapolis. Within the previous two years, Mandel and Sauerbrey pointed out, Northrop Grumman, Hilton Worldwide, SAIC, Volkswagen of America and Computer Sciences Corp. had each bypassed Maryland in favor of locating major facilities in Northern Virginia — taking their jobs, employees and corporate tax revenue with them. No wonder, since Maryland’s overt hostility toward job-creating businesses is no secret. In 2006 the General Assembly passed a Wal-Mart-only tax, which was later declared unconstitutional. A 2007 tax increase on service businesses and “millionaires” backfired, resulting in lower revenue being collected from a diminishing pool of high-income earners who opted to get out of Tax Town altogether. Surveying the high regulatory costs imposed by state government here, business executives elsewhere could be forgiven for thinking Maryland politicians and bureaucrats would view them as convenient ATM machines to pay for more special-interest spending programs.
The loss of private-sector economic activity has been masked, at least temporarily, by federal stimulus funds that kept Maryland and many other states afloat. But the stimulus is winding down. Referring to the end of stimulus funding as “the cliff,” states across the country are having to cut their spending dramatically, by at least $18.7 billion from 2008 levels, according to the latest “Fiscal Survey of States” report by the National Governors Association.
