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File photo The Annapolis Capitol dome seen from State Circle.
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Douglas Doerfler

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This report was corrected on Jan. 9, 2012. An explanation follows.

With federal budget cuts making private-sector job creation in Maryland more important than ever, legislators should be especially careful about passing laws this year that inhibit businesses, executives say.

“There is a renewed appreciation for private-sector job growth,” said Ronald Wineholt, vice president of government affairs for the Maryland Chamber of Commerce in areas such as economic development, health insurance, small business, taxes and tort reform.

Small businesses want to see a “do no harm” policy from legislators, said Ellen Valentino, Maryland state director for the National Federation of Independent Business, a trade group for small companies.

“The economy is still very unsettled,” she said. “We may see more measured action with respect to considering laws that could adversely impact businesses.”

This year especially, legislators “must not allow themselves to settle for clever approaches to simply get through another year of fiscal challenges,” Donald C. Fry, president and CEO of the Greater Baltimore Committee, wrote in a recent column on the group’s website.

“Even in Maryland, where the federal presence here has provided a long-term cushion of stability, we must recognize and act upon the reality that our state's economic paradigm is shifting,” Fry said. “Only an engaged, diverse, and productive private sector can pull Maryland into the era of growth that we are clearly capable of achieving. It's up to our elected leaders, through smart policy decisions, to put entrepreneurs, investors, business owners and managers and their employees in position to succeed, grow and thrive.”

From last January through November, the state’s private sector created 98.5 percent of the net new jobs, 26,300, compared with only 400 new jobs in the public sector, according to federal figures. In the same time period in 2010, the private sector created 88.7 percent of the 15,000 new jobs. Last year’s total of new government positions in Maryland was the lowest since 2004.

With companies such as San Francisco power and engineering giant Bechtel moving employees across state lines, every state legislative committee and legislator should consider the impact of a law on Maryland’s business competitiveness before approving it, Wineholt said. Bechtel is moving 625 jobs — some of which are military-related — from Frederick to Virginia.

“We face strong competition from Virginia,” he said. “This cuts across a wide variety of issues — taxes, workplace regulations, health care.”

The annual three-month regular legislative session in Annapolis starts Wednesday.

Health care exchange

How the medical insurance exchange, where individuals and small businesses can access more affordable medical insurance, is implemented will likely be the biggest big health care issue for employers, Wineholt said. The chamber agrees with many of the recommendations of the exchange board, such as keeping the small-group market plan separate from the individual risk pool, while seeking that the private health insurance market be maintained as a competitor to the exchange.

Valentino is looking for a “strict” implementation of the federal insurance reform law to “make sure that Maryland doesn’t go beyond” it. She also noted the uncertainty over the law stemming to court challenges — the U.S. Supreme Court is expected to consider the constitutionality of the law’s individual mandate this year — and the possibility of a new administration in the White House next year.

Several business groups, including the Montgomery County, Gaithersburg-Germantown and Maryland chambers, support increasing the gasoline tax as long as the added revenues are dedicated to transportation improvements and not used to shore up the general fund. A state commission on transportation funding recently recommended increasing the fuel tax 15 cents per gallon over three years and amending the state constitution to prohibit transferring the money from the transportation trust fund to non-transprotation use except in “declared fiscal emergencies.”

The commission also wants to increase some fees, including vehicle registration by 50 percent.

Wineholt said he expects to see a number of other tax proposals, such as combined reporting or even imposing a sales tax on certain professional services.

“We continue to feel that increasing taxes on businesses will make it that much more difficult for businesses to expand,” he said.

The legal arena is another that’s expected to attract a lot of legislative attention this session. The chamber, which will sponsor its annual Business Day where members lobby lawmakers on key issues on Jan. 19, will resist legislation that expands the grounds to sue employers or contributes to the company’s legal costs, Wineholt said. That includes legislation that would provide for tort liability based on comparative fault.

Regulatory reform, including streamlining regulations, will be a big issue for small companies, Valentino said. She would like to see the state adopt a version of the federal Regulatory Flexibility Act, which requires agencies to review regulations for their impact on small businesses and consider less burdensome alternatives.

“The key is to look for alternatives to regulations that would not be a burden to small businesses,” Valentino said.

Biotech seeks boost

Legislators should boost the state’s biotechnology investment tax credit from $8 million to $12 million in fiscal 2013 and eventually up to $24 million, leaders of the Tech Council of Maryland say.

The credit helped MaxCyte raise even more money from other sources as a recipient, said Douglas Doerfler, president and CEO of the Gaithersburg biotech. He also is vice chairman of the tech council and chairman of its MdBio division board.

“We were able to leverage each $1 of tax credits our investors received to raise an additional $6 in funding,” he said. “It’s a really great program.”

The trade group also wants the state’s research and development tax credit cap to be raised to $12 million from $6 million and supports more funding for the Maryland Venture Fund. At the same time, it wants legislators to hold off on new taxes such as a computer services sales tax and combined reporting.

“We know it’s a tough environment,” Doerfler said. “The idea is to ensure we have programs in place that help early-stage companies and biotech and high-tech businesses to build these businesses and create jobs.”

The group also wants to see long-term, stable funding solutions for Maryland’s transportation infrastructure and higher education system. The Tech Council will outline its new policy platform at the annual leadership dinner Jan. 18 at the Loews Annapolis Hotel. The Greater Baltimore Committee has its legislative forum on Jan. 23 at the Baltimore Marriott Waterfront Hotel.

kshay@gazette.net

Explanation: Some, not all, of the 625 jobs that Bechtel is moving from Frederick to Virginia are military-related.