Maryland is not making a good impression on chief executive officers, according to a survey in Bizjournal.com, which ranks it as the 40th business-friendly state in the nation.
Del. Kelly Schulz (R-Dist. 4A) of New Market used that dubious distinction last week as a starting point for a seminar she sponsored for business owners in Frederick.
Wedged between Rhode Island and Hawaii, Maryland fell three spots in the CEO’s eighth annual survey of the best and worst states in which to do business. States are “graded” on areas such as tax and regulation, quality of workforce and living environment.
For the 650 CEOs who responded to the survey, the overriding comment was that Maryland’s “income-tax increases on middle class nick and frustrate business owners.”
In the survey, Maryland reported as much productivity growth as top-ranked Texas and an unemployment rate that is lower than the national average. It fell in the rankings in the categories of taxation and regulations.
Schulz — who earned points with the business community this year when she initiated successful workplace fraud legislation easing the state’s requirements on satisfying employee and independent contractor status — wants to keep the momentum going by finding out how government helps or hinders business growth.
State-sponsored tax incentives and programs are geared toward larger businesses, leaving out small businesses, she said.
“Some of the small business owners can never meet the state requirements for incentives,” she said in an interview. “They are struggling ... so what is going to make them want to stay in the state?”
The seminar, held Thursday at the Hampton Inn-Fort Detrick, drew 75 people, including business owners, lobbyists and others, some from out of the area.
During the two-hour event, Schulz pointed out that 99 percent of local business owners at the seminar could not qualify for the state’s incentives programs.
The first half of the two-hour seminar featured presentations by state and local economic development officials, the head of a business advocacy group and a lobbyist from the Americans for Tax Reform.
After the presentations, the panelists were questioned by the attendees, many of whom expressed frustration at the lack of incentives for small businesses.
The state defines a small business as one with less than 50 employees.
In an interview, David Hawkins, owner of Hawkins Landscaping in Thurmont and president of a local landscaping association, said that although Maryland offers many economic opportunities, state regulations and the lack of attention to the small business owner are discouraging.
“The state really doesn’t do anything for small business,” Hawkins said. “My son is fifth generation here. Our blood is in the soil. There’s so much opportunity here, but the backside of that is the state seems anti-small business.
“Kelly [Del. Schulz] has a lot of good ideas and enthusiasm, and she’s trying, but she’s hitting a brick wall with Dems and the good-old-boy system.”
Farrell Keough attended the seminar as part of his role in the newly created advocacy and planning group, Engaged Citizens. He was even harsher in his criticism of the state’s business policies, primarily taxation and regulation.
“Government is a necessary evil, but to not acknowledge smaller businesses is antithetical to business,” he said.
Schulz billed the seminar as nonpartisan, inviting Sen. Ronald N. Young (D-Dist. 4) of Frederick, who has been holding business roundtables for two years.
Young dismissed the CEO survey and pointed to Maryland’s top ranking in education, among other qualities that make it a good bet for business.
As for the criticism about Maryland’s policies, Young said many businesses come to the state looking for that kind of help.
“I don’t want to start with the premise that something is bad, but if you tell me what the problem is, I will work to try and change it,” he said.
The seminar was a first step, said Schulz, who is asking for more feedback from local businesses.
In her view, Maryland should do away with many of its incentives and lower taxes all around.
“Why not look at reducing the overall tax burden for every business in the state, no matter where you are or what your employee size?” she asked.
The benefits would be more universal, and the state would not be in the business of picking and choosing who deserves government help, she said.
Chris Chase, president of Donald B. Rice Tire Co. in Frederick, said the city and county have programs to help small businesses, while the state serves larger corporations.
Medium-sized businesses like his don’t really need that kind of assistance, he said.
“To me it all comes down to taxes,” Chase said.
He deemed the seminar “a worthy effort.”
“You’ve got to start somewhere,” he said.