BUSINESS CLIMATE
| "This is no surprise. Maryland's reputation as being very hostile to business, particularly small business, is well earned." Maryland congressman (and recently elected governor) Robert L. Ehrlich, Jr. reacting to a recent report from the Small Business Survival Committee, in the March 20, 2002 edition of The Daily Record. |
Marriott International figured it could save $42,000,000 over 15 years by getting out of Maryland and moving its corporate headquarters to Virginia. Virginia offers lower corporate taxes, lower sales tax, a less hostile regulatory environment, and the Right to Work. Then there's Virginia's attractive personal income tax rate, substantially lower than Maryland's, that would benefit Marriott employees and their families. Marriott understands Virginia's hospitality: the right combination of costs, accommodations, and amenities. In short, Virginia "gets it" and Marriott knows it.
So, to avoid the embarrassing loss of yet another business presence, the State of Maryland offered up corporate welfare -- a package of enticements, enhancements, incentives, and subsidies extolled by government officials as "the most lucrative in State history."
It's too bad. Marriott could have been the catalyst for much needed, fundamental change. But tax reduction, regulatory detoxification, and similar measures would mean less government and that's not going to happen, not in the Free State. Instead, the State of Maryland will divert between $31 and $44 million into the coffers at Marriott.
Robert L. Flanagan, a member of the Maryland House of Delegates, quoted in the March 12, 1999 issue of The Daily Record,said it best:
| "It's a shame that we have to negotiate, that the business environment in Maryland is so bad that we have to make this kind of astronomical payment to keep them here." |
Maryland's willingness to transfer wealth from small business to big business is bound to attract any company large enough to threaten the State with an economic black eye - a business the size of Phillips Publishing International, Inc., for example. Phillips has hinted that it too may make the move from Maryland to Virginia.
A Phillips vice-president, quoted in The Daily Recordof April 17, 1999, put it succinctly:
| "We would be negligent in terms of long-term planning not to look to Virginia, considering the tax and regulatory situation in Maryland." |
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"Leaders of the state business community complain they still don't get enough respect from Maryland lawmakers, despite being the primary generator of a booming economy and the state's budget surplus of some $1 billion." From the April 26, 2000 edition of The Daily Record.
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