Chamber members discussed issues with state Sen. Jim Mathias (D-38), and Delegates Michael McDermott (R-38B) and Charles Otto (R-38A). One study the legislators referenced during the meeting was a study by the tax research group Tax Foundation, “2014 State Business Tax Climate Index.” 

Maryland was ranked 41 in the index and was listed among the 10 lowest ranked states for business in the country.

The foundation said its index “compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property. The ranks of neighboring states are as follows: Delaware, 13th, Pennsylvania, 24th, West Virginia, 23rd, and Virginia, 26th.”

The study also noted that comprehensive reforms passed by officials  in 44th ranked North Carolina this year would allow the state to raise its ranking to as high as 17th next year, if the reforms take effect in coming years. The legislators used that caveat as an example that Maryland could also reverse it downward ranking.

In response to a question of what could be done to change the state’s business climate ranking, Mathias suggested that lawmakers should continue to focus on proposals to reduce corporate taxes and streamline the regulatory process. He cited taxes as the number one reason for the low ranking and pointed out that as a senator he has not voted in favor of tax increases. He said he once voted for an income tax on millionaires as a delegate. 

Several questions raised the issue of the Maryland Department of Agriculture’s recent proposal to mandate a shift in the way chicken manure will be used on farmland. One commenter called the proposed rule, the phosphorus management tool, a tax that would kill the farming business on the Eastern Shore.

Mathias noted that the proposal was a tool not a tax and that he had been instrumental in getting it pulled when it was proposed as an emergency regulation in August, only to have department officials immediately restart the proposal process. Mathias said he had discussed the regulation with Lt. Gov. Anthony Brown, whom he said he told the proposal would be a farm business killer for the Eastern Shore. 

A revised version of the earlier regulation, which proved to have a calculation error, was proposed on Oct. 18. 

Otto, who said he had worked in conjunction with Mathias on several legislative issues during the 2013 legislative session, agreed with the senator’s assessment, adding that a major push for the regulation was coming from large, well-funded environmental groups and campaign donors. But he also noted that the emergency regulations were pulled when the matter was scheduled for a hearing before the General Assembly’s Joint Committee on Administration, Executive and Legislative Review. MDA officials expected busloads of farmers to show up at that AELR hearing, he said.

Otto said the MDA had committed $2.5 million for efforts to turn manure into energy. 

On its Web site, the MDA has issued a Request for Information “to gather input from vendors, businesses, and individuals offering technologies, equipment, infrastructure, or services that can improve the management and utilization of manure and other agricultural resources. Maryland’s nutrient management regulations govern the amount, timing, and placement of crop nutrients including manure and other organic nutrient sources.”

Mathias added the science for that was going forward and that in the next session legislators would likely be proposing a bill to co-op a bio-digester that was being built with private funds on the site of the Lambertson Farms in Stockton. 

McDermott criticized the PMT for being both unnecessary and incomplete. He said the science behind the proposal had not been completed and no study on the economic impact had been done when the regulation was proposed. The scientific study has not been peer reviewed, he added later, when he also noted that the proposal could also render chicken manure as prohibited for organic farming, which relies on natural fertilizers rather than commercial fertilizers with unknown substances.

Asked what they perceived as the most burdensome regulatory issues facing businesses in the state, Otto named stormwater management. While he did not dismiss the need for some form of flooding control, at issue he indicated was what level of regulation was needed to address the problem. He called some of the current requirement, “A bit of overkill.”

Mathias listed permitting, processing and over-enforcement of sometimes minor code and regulatory infractions. The legislators commented they had received many complaints from business owners with anecdotes of fines, fees and work stoppages that interrupted their operations over minor issues.

McDermott, who proposed a bill (HB-104) during the past session that would have given businesses a grace period to correct cited violations before a fine was imposed, said he had been told by state officials that businesses receive warnings prior to a fine being levied. Business owners, he said however, had told him otherwise. 

On the issue of the education proposal known as Common Core, McDermott said that he opposed it because it represented yet another move away from local-level decision-making, which he said was increasing. “If Maryland continues on the path they are on,” he said, “Whether you like it or not it won’t matter.” He added that government works best when it is closest to the people.

Mathias pointed that Common Core was not rigid curriculum, but an educational standard that could help the area’s children have better educational opportunities and to be more competitive in the jobs market. Noting that former state Superintendent of Schools Dr. Nancy Grasmick participated in the establishment of the Common Core standard, Mathias said “Maryland had a seat at the table.”

On energy policy—they were specifically asked about nuclear energy—Mathias said that a deal to move a proposal forward on nuclear energy fell through after a tsunami caused major structural and environmental damage to a plant in Fukushima, Japan.

McDermott said the state should be moving forward in all aspects of energy production, but was not due to political correctness. He noted the jobs boon created in the Marcellus Shale region of Pennsylvania from the production of natural gas, and contrasted it with Maryland’s push for developing wind farms off the coast of Ocean City, which he called “counterintuitive.”   

Mathias listed the core economic drivers for the Eastern shore as agriculture, tourism, small businesses, and the emerging medical industry. Otto said the state needed to promote a “sensible regulatory climate” for business and that shut-downs and regulatory fines were having a negative impact on development. McDermott said the state had lost seven fortune 50 companies and was also losing wealthy residents, which was triggering proposals for more taxes spread over a wider zone.

The lawmakers each stressed the importance of constant contact with the Worcester County Commissioners and local municipal leaders in directing their legislative efforts. Mathias noted that both he and McDermott were former mayors and said that his first responsibility was to be there (in Annapolis) for and with local government officials, along with communication with fellow legislators in Annapolis. He said it was important to have the ear of leaders in the General Assembly, even through adversity. But when the issues pass, he said, “We have to move on.”

He cited state proposals  to remove the liquor control board and resistance to gambling where he was able to work through the issue by building dialog and trust with his counterparts from other delegation—even if it was accomplished through annual samples of local favorites like salt water taffy and popcorn.  

Otto challenged local business to talk to friends and relatives in other parts of the state as a way to raise awareness of the special concerns of citizens on the Eastern Shore, when asked for ideas on the best way to protect the values of the Eastern Shore way of life. “It’s a sales job,” he said.

McDermott noted that members of the General Assembly agree on roughly 85 percent of the legislation that is proposed. “You’re only asking people to fight for that other 15 percent,” he said.