Predictability and progress: Those are the elements business owners argue are needed most from the federal government.
What they don’t need: gridlock.
With public opinion polls indicating that 86 percent of Americans disapprove of the job Congress is doing, many business owners are pointing to lawmakers’ unwillingness to compromise as the root of many of their problems.
“Gridlock doesn’t help anyone,” said Robert Campbell, owner of Qvinta, an energy services company in Fort Washington. “It stalls business all the way around.”
The issue came up numerous times during the Maryland Chamber of Commerce’s annual dinner with the state’s congressional delegation Monday at Martin’s Crosswinds in Greenbelt. More than 300 businesspeople attended to hear what their representatives and senators had to say and to broach their own concerns about the federal government’s direction for business.
Eight of the state’s 10-member delegation participated — missing were Democratic Reps. Christopher Van Hollen (Dist. 8) of Kensington and Elijah E. Cummings (Dist. 7) of Baltimore — with each addressing a key issue, including economic stimulus, small-business help and energy policy.
“Until we come up with comprehensive solutions, businesses are always going to be looking over their shoulder, wondering when the next tax is coming,” William Burns, spokesman for the chamber, said in a later interview.
He said gridlock on Capitol Hill affects everything from the federal budget — on which many Maryland companies especially rely — to tax credits and business programs.
Sen. Barbara A. Mikulski (D) of Baltimore attributed some of the gridlock to federal rules that require the Senate to vote on a motion to proceed for every bill brought to the floor.
Rep. C.A. Dutch Ruppersberger III (D-Dist. 2) of Cockeysville said both parties must stop viewing the other as the enemy and that they should all be embarrassed to be a part of the stalemate.
Rep. Steny H. Hoyer (D-Dist. 5) Mechanicsville, the House minority whip, even went so far as to remind attendees that when voters are divided, their representatives will be, too.
“We will get together when you do,” he said.
Mikulski exhorted the public to start a national outcry to end this situation and “start a Twitter revolution.”
The cost of indecision
Meanwhile, business owners struggle to predict what impact pending political decisions might have on their strategic plans and policies.
“Sometimes having a decision, even one you disagree with, is better than none at all,” said David Edgerly, executive vice president of HarVest Bank of Maryland in Gaithersburg, in a later interview. Edgerley is a former secretary of the Maryland Department of Business and Economic Development.
Although the indecision can be merely frustrating in the short term, it can inhibit job and business growth in the long term, he said.
Eric W. Franklin, president and CEO of Erimax, an information technology company in Largo, also expressed frustration following the dinner at his inability to ask the politicians what each of them was going to do to reach across the aisle.
Franklin said he is particularly concerned about keeping business taxes down and reducing regulations so that businesses have time to work.
“If you keep my taxes down, I can hire people. If you raise my taxes, I can’t hire. It’s that simple,” he said, adding that in place of some of the taxes he paid, he could have hired two people.
Erimax employs 75.
Rep. Roscoe G. Bartlett (R-Dist..6) of Buckeystown agreed that cutting back on corporate taxes and regulations in favor of letting competition manage the market would benefit small businesses.
He said the current regulations are based on the assumptions that “all corporations are evil” and “consumers are gullible and stupid.”
Unpredictable taxes
The ever-changing tax situation also hits Maryland in its friendliness toward businesses, said Donald N. Hoffman, principal at Hertzbach & Co., a certified public accounting firm in Owings Mills and Bethesda.
Hoffman described tax increases as a cycle in which the state drives out businesses by hiking taxes, thus cutting corporate profits and leading to future tax increases to compensate for the lost tax revenue.
“I’m not sure how to address [gridlock]. From what I can tell, they’re just not getting along,” said Oscar Revere, vice president of the Elocen Group, managing consultants in Bowie. “It’s hard to establish a model for the future without a strong direction from the government.”
Revere, who also spoke later in the week, said he would like to see more predictable tax rates instead of the continuous short-term budget planning at both the state and federal level.
“When you’re constantly sitting around, theorizing, it’s hard to grow your business,” he said.
Hoffman also argued that federal and state measures that offer tax credits for creating jobs have little impact on hiring, as employers hire because they need workers, not because of incentives, which may be offset by payroll and other labor costs.
Renewable energy efforts stymied
Legislative gridlock also hurts Maryland businesses’ ability to maintain their leading role in the cybersecurity and renewable energy sectors, Burns said.
“We need predictability and confidence for private businesses in those areas to make the right decisions and hire people,” he said.
Campbell said companies’ inability to know what renewable energy subsidies are available, as Congress keeps arguing over them, also is slowing down the industry.
“We’ve got to find a way to move in a direction one way or the other,” Edgerley said about the country’s need to establish an energy policy.
For companies such as Tri Gas & Oil in Federalsburg, federal uncertainty over drilling projects affects supply, said Nash McMahan, vice president of business development. McMahan, whose business includes propane, said at the dinner that he is particularly interested in accessing natural gas from the region’s large Marcellus Shale formation.
Rep. Andrew P. Harris (R-Dist. 1) of Cockeysville advocates keeping regulation of natural gas with states instead of the federal government, but Revere and Campbell say that depends on where the drilling occurs.
‘Break with reality’
Jeffrey Hutter, president of TWR Communications in Cumberland, said term limits would solve gridlock.
“We need new blood and new thinkers. An incumbent hardly stands the remotest chance of getting voted out,” he said in a later interview. “I want to see people who aren’t lawyers or people who’ve never had the grief, worry and sorrow that comes with managing employees.”
Hutter blamed a “break with reality” as the biggest problem Congress has when it comes to understanding the needs of businesses.
“They have no idea what it takes to run a business,” he said.
Hutter said if businesses believed they had leaders and not “professional politicians,” as well as a stable economic environment, they would feel more confident about growing.
“Nothing is happening. When you’re in business that makes you nervous. You’re anxious about hiring,” he said, adding that his business went from 45 employees to 22 during the last 10 years.
Infrastructure projects as a solution?
Executives had mixed opinions about federal and state stimulating growth through infrastructure projects.
Edgerley said the nation has a history of having public works projects boost the economy and that the U.S. must maintain its infrastructure for future Americans.
Maryland’s lack of funding for its transportation infrastructure projects has cost it up to 40 percent of the civil engineering work force, said Nathan J. Beil, president of KCI Technologies in Sparks. KCI is an employee-owned firm.
Because two-thirds of KCI’s income derives from state projects, the absence of a constant stream of funding makes it impossible for clients to plan for projects, which occurs two to five years in advance.
“I would support any measure that lends money to the state’s transportation fund,” Beil said, referring to Maryland’s current discussion over raising fuel taxes.
Hutter questioned whether some of the infrastructure work actually is necessary, saying it would be more effective to reduce regulations on businesses to produce the same effect.
Campbell said the government also should focus on educating its youth for more high-tech jobs.
“Hopefully, people can put politics aside to move certain things and find middle ground on these important issues,” Burns said.
lrobbins@gazette.net
Copyright © 2012 Post-Newsweek Media, Inc./Gazette.Net