Maryland has improved in its business competitiveness over the past year, but still must protect its key assets and areas in which it fares better than most states, Gary Keith, a vice president and regional economist with M&T Bank, told business leaders this week.
“Our economy is a unique economy, and we should embrace it,” Keith said during the Maryland Chamber of Commerce’s Business Policy Conference at the Hyatt Regency Chesapeake Bay Golf Resort in Cambridge on Wednesday. The two-day conference ended Thursday.
Though the state still does poorly in areas such as tax and regulatory burdens, Maryland showed improved scores in several key studies, enough to climb to 11th place in Keith’s overall business-friendly national rankings. Last year, the state was 14th in that study, which considers factors such as business growth, unemployment rates, health care mandates and tax climate.
Virginia was sixth — a ranking not lost on Maryland business leaders.
“We lost a key battle for a corporate headquarters to Virginia last year,” said William T. Riley Jr., a principal in Reznick Group’s Baltimore office and the Maryland chamber’s board chairman, referring to Northrop Grumman, which moved from Los Angeles. “And we face other battles. These studies tell us why we fight that battle.”
It’s encouraging to see that Maryland has improved in numerous criteria, said Kathleen T. Snyder, president and CEO of the Maryland chamber. But she cited challenges highlighted by the recent flap over the Montgomery County Council introducing — and then withdrawing — a resolution advocating a reduction of federal military spending. Bethesda military contracting, information technology and aerospace giant Lockheed Martin reportedly lobbied against the proposal, while Virginia officials reportedly contacted Lockheed to inquire about a possible move across the Potomac.
“Lockheed’s jobs are high-paying ones that we want to do everything we can to keep,” Snyder said. “Everyone wants peace. ... But that kind of resolution that could drastically impact a major employer sends the wrong message.”
Maryland does have higher taxes than many surrounding states, and it can take an unusually long time to get new projects approved, some executives said.
“It shouldn’t take three years to build an office building,” said James W. Cornelsen, president and CEO of Old Line Bancshares in Bowie.
The state has multiple levels of government inspections — local, state and federal — that are redundant, said Stu FitzGibbon, refinery manager of the Domino Sugar plant in Baltimore.
Snyder also urged political leaders not to tack on more business taxes and workplace regulations that could push businesses across the Potomac.
“We’ve heard there will be proposals to expand the sales tax base,” she said of the upcoming General Assembly session. “Combined reporting will likely be reviewed again.”
Maryland ranks third behind only Massachusetts and New Jersey in innovative, “high value-added” services such as information technology and cybersecurity, Keith said. In work force education, the state was second only to Massachusetts.
“These are the kinds of areas we have to protect,” Keith said.
Among the categories in which Maryland improved was a survey of executives asking them to rate states on business climate. In the results, released this month by Site Selection magazine, Maryland was 21st, up five spots from last year.
That contrasted with No. 44 in a Tax Foundation study of business tax climate in 2010.