- The Washington Times - Monday, January 3, 2000

MARYLAND

The Maryland business community is heading into the 2000 General Assembly session with a new leader and ambitious goals that include finding more money to pay for long-term solutions to the state's transportation problems.

Kathleen T. Snyder has stepped into the role of chief executive of the Maryland Chamber of Commerce, replacing Champe McCulloch, the often outspoken critic of Gov. Parris N. Glendening's performance on business issues.

Ms. Snyder, former president and chief executive officer of the Alexandria Chamber of Commerce, faces a formidable task in Annapolis when the 90-day session begins Jan. 12.

Among other things, business will seek to:

Find more money to add to the state's transportation funding.

Fend off an anticipated challenge to a law that protects businesses against punitive damage awards.

Overturn a ruling that reduces late fee charges for overdue bills.

Business groups plan to continue their fight to increase the state's $2 billion transportation fund, which currently has enough money to handle short-term projects but will be unable to handle roadway and mass transit projects in the future.

"We've got to look at this long term," said Robert O.C. Worcester, president of Maryland Business for Responsive Government. "We've already got a serious congestion problem. It's just a question of getting worse."

Last year, the governor and legislative leaders decided against increasing the gasoline tax to give more money to the transportation fund, saying there is enough money to sustain the transportation system for the short term.

According to the Commission on Transportation Investment, a task force that analyzed the state's transportation system in the fall, Maryland will need to make a minimum investment of $27 billion in transportation over the next 20 years.

By 2020, Maryland's population will have increased by 1 million. Within 20 years there will be 700,000 more jobs in the state and the number of vehicle miles traveled will have increased from 48 billion to 68 billion.

Mass transit

In addition Baltimore/ Washington International Airport travelers will double to 30 million in the next 20 years.

"The chamber has concerns that we don't have enough funds for all the projects needed to be done in Maryland, not just on highways but mass transit," Ms. Snyder said.

The issue at hand is maintaining the solvency of the Transportation Trust Fund, which provides money for the state's transportation needs, from highways and mass transit to airports and the port.

Highway-related revenues provide between 75 percent and 80 percent of the fund's $2 billion budget, according to the Maryland chamber. More than 40 percent of the Transportation Trust Fund goes to mass transit, while only about 35 percent goes to highway maintenance and construction.

"Mass transit is consuming so much of the fund," said Robert L. McKinney, president of the Baltimore County Chamber of Commerce. "It's draining the fund."

Speaker of the House Casper R. Taylor, an Allegany County Democrat, is proposing legislation that would take one penny of the existing sales tax out of the revenues dedicated to the state's operating fund budget.

That allocation, which would be phased in over a five-to-10-year period, would generate $500 million and be put toward a mass transit account within the Transportation Trust Fund.

The business community agrees that the funding issue needs to be addressed and thoroughly analyzed but does not necessarily support Mr. Taylor's proposal of earmarking funds.

The Maryland Chamber of Commerce wants a thorough analysis to identify the potential use of a portion of the general funds for transportation, said Mitch McCalmon, vice president for government relations for the Maryland Chamber.

"There's a huge surplus in the general fund," said Tom Saquella, president of the Maryland Retailers Association. "Why it would be tied to the sales tax, we don't know. To us that raises alarm."

However Mr. Taylor's proposal is "a place to start the debate," Mr. McCalmon said.

Mr. Taylor says his proposal will increase the state's financial commitment to transportation without raising Maryland taxes a notion favored by the business community. "Businesses are not interested in paying higher taxes," Mr. McKinney said. "If surpluses are not returned they would like to see it invested in the infrastructure."

Inter-County Connector

Also of concern to business is how the General Assembly deals with the controversial Inter-County Connector, the proposed east-west road connecting Interstates 95 and 270 north of the Capital Beltway.

In September Mr. Glendening, once an ICC supporter, said he would build only the outer ends of the roadway and have the land in the middle sold off. That sale must be approved by the two other members of the Board of Public Works, who are opposed to the sale of that land. The door remains open for future construction of the road.

"We'll be watching legislation to make sure land is not sold off," Ms. Snyder said. "That corridor is becoming more important to the state. The ICC is desperately needed.

"The business community is really angry," she said. "We're mobilizing to make sure we have legislative support committed to making sure the ICC is built."

In addition, the six-lane Woodrow Wilson Bridge, which carries Beltway and Interstate 95 traffic over the Potomac River between Prince George's County and Alexandria, is in need of an additional $600 million for its much-needed reconstruction.

Congress has agreed to pay $900 million of the $1.9 billion project. Both Maryland and Virginia have already contributed $200 million each to the project that would make the federally owned bridge into 12 lanes.

Punitive damages

On another front, the business community and trial lawyers will fight it out again this year over a Maryland statute that prohibits anyone who files a lawsuit from collecting punitive damages if the person filing the suit is at all responsible for the damage or injury. Legal groups want the law changed to allow those suing to collect a percentage of damages based on the degree of fault.

However, Maryland businesses consider this statute an attribute for the state, which is one of only five jurisdictions that has a similar law on contributory negligence.

"We see it as a strong economic development tool," Ms. Snyder said. "It gives businesses that certainty that other states don't have."

"We need to keep the state laws the way they are," said Diane Hutchins, vice president and director of government relations at the Greater Baltimore Committee. "We think the system works the way it is."

The Maryland chamber will be fighting hard this session to allow businesses the opportunity to impose a late fee exceeding the current rule of 0.5 percent of a monthly bill for goods and services.

In June, a group of Baltimore cable customers won a class-action lawsuit against United Cable Television, a division of Tele-Communications Inc. of Denver, alleging that the $5 flat fee that could be levied against them each month was excessive.

The Court of Appeals of Maryland ruled that United Cable can only charge a late fee that is 0.5 percent of the total bill, and ordering the company to pay $6.7 million to the plaintiffs and their attorneys.

The ruling affects not only cable companies but service-oriented businesses such as child care, home protection and health clubs.

The Maryland Chamber says that a late fee of only 0.5 percent of the total bill "is not an incentive for people to pay their bills on time," Ms. Snyder said.

In the long run, she said, this will affect businesses' cash flow and as a result they will have to raise their prices.

"You and I will have to pay more because of the dead beats," Ms. Snyder said. "This is a consumer issue, but businesses need protection too."

Financial assistance

The Maryland Department of Business and Economic Development (DBED) will be working this session to consolidate the state's financing programs.

Richard C. "Mike" Lewin, secretary of DBED, said when he came into office more than a year ago, he found 25 different financing programs, all offering various financial assistance to businesses.

The numerous programs were confusing and "virtually impossible to understand," he said. As a result DBED will propose legislation to drop the number of financing programs to 10, all having similar approval requirements and rules.

In addition DBED will propose changes in the Maryland Science Engineering and Technology Development Corp., a group that commercializes intellectual property. The changes include expanding the group of technology experts and changing the name to the Maryland Technology Development Corp.

"When I am marketing [to technology firms] on behalf of Maryland, I want to have [technology experts] that will help make that deal happen," Mr. Lewin said.

DBED will also attempt to get the budget for the state's film commission raised, as well as offer tax exemptions to companies filming in Maryland.

The Sunny Day Fund, used to promote economic development, will not play a major role in the session this year. Mr. Lewin said some aspects will be changed to make it more efficient, such as having a smaller committee review deals of $2.5 million or less, instead of the full Sunny Day Fund Committee.

"The Sunny Day Fund will only be used for truly distinct economic development [opportunities]," Mr. Lewin said.

VIRGINIA

Policy-makers in Virginia this year appear ready to heed calls for more money to improve the state's transportation system, a top priority of business groups.

"The issue finally has some legs because policy-makers are now embracing, recognizing, the issue," said Sandy Bowen, senior vice president of the Virginia Chamber of Commerce.

Business groups, legislators and motorists have been talking about ways to deal with traffic congestion in Northern Virginia and other parts of the state for years. They expect their efforts to bear fruit this legislative session, as the General Assembly takes up a transportation funding package proposed by Gov. James S. Gilmore III.

Along with transportation, business interests will focus on education and work-force issues in the session, which begins Jan. 12.

"It is essential that this session of the General Assembly make a significant step forward in addressing the transportation situation in this commonwealth," Mrs. Bowen said.

She added that a strong transportation system is vital to the state's economy.

"To [compete] you've got to move people and goods," she said.

Mrs. Bowen and representatives of business groups said that transportation problems are not confined to Northern Virginia. They said they are also concerned about congestion in Hampton Roads and Richmond, as well as economic development and transportation issues in the west and south.

Tracy Baynard, a lobbyist for the Northern Virginia Roundtable, a group of about 100 business executives, said Northern Virginia companies should be able to expand within the state and to do that, they need good roads.

"It is important that every part of Virginia has a transportation infrastructure that allows it to fulfill its potential economically," said Ms. Baynard, of McGuire Woods Consulting.

Six-year plan

Mr. Gilmore introduced a six-year, $2.5 billion transportation package in August, which business groups supported. The package included a $200 million payback to the transportation trust fund for money the state borrowed during the early-1990s recession.

In addition, the governor wants to create a priority transportation fund using $100 million from the general fund this year and $150 million each year thereafter. Some of the money gained from the state's portion of the tobacco settlement would also go into the fund.

The priority fund could be used to fund projects such as a Dulles Corridor Rapid Transit Project, rapid rail between Richmond and Washington, and a third lane on Interstate 81.

But the proposals are short-term solutions to transportation problems. Mrs. Bowen said the General Assembly is awaiting a report from the governor's commission on transportation policy, to be released next year, to address long-term issues.

Douglas Koelemay, vice president of public affairs for the Northern Virginia Technology Council, identified areas he said were in need of immediate attention. He said the state needs to improve access to Tysons Corner through the Dulles Toll Road, and construct a "techway" to connect technology workplaces in Maryland and Virginia and take pressure off the American Legion Bridge.

The road would link the Interstate 270 corridor with the Dulles and Reston areas, and would include a new bridge over the Potomac River.

Virginia legislators and Mr. Gilmore support the idea, he said, but Maryland Gov. Parris N. Glendening does not endorse it. Mr. Koelemay said the Virginia side may work out an arrangement with Montgomery County to build the road.

Mr. Koelemay said that Fairfax, Loudoun and Montgomery counties are the fastest-growing in terms of jobs in the area.

"It makes sense to make our transportation system reflect what's going on in the economy," he said.

Training workers

Mr. Koelemay is also an advocate of improving education in Virginia with an eye toward training much-needed technology workers. He said his group is trying to increase funding for Internet access in state classrooms and technology training for teachers.

Mr. Gilmore has suggested other measures aimed at making Virginians more technologically savvy, which the technology council supports and the legislature must approve.

The governor proposed an $8.7 grant program for community organizations that offer Internet access to the public. He also wants to start the Virginia Technology Internship Program, which will give tax incentives to students and businesses that participate.

"The economic payback is pretty fast on those programs," Mr. Koelemay said, because when participants get jobs, the state gets income taxes.

Mrs. Bowen said her organization is trying to increase education funding, especially regarding accountability. She supports the controversial Standards of Learning tests the state implemented about six years ago, but said they still need work.

"These things are a work in progress. They are undergoing modification. We don't believe that those difficulties ought to deter us from staying on course," she said.

"There has to be some accountability, some way to determine: what is it that these people are coming out of school with?"

Tax issues

Last year, the Virginia chamber and other business groups challenged as unfair the state's tax revenue distribution to localities. While the state was flush with surpluses, counties and cities were strapped for cash to fund infrastructure including schools and development, said Nancy Reed, vice president of policy and communications for the Fairfax County Chamber of Commerce.

The state created a citizens' committee, whose 13 members were appointed by the General Assembly, to examine the tax issue and come up with solutions over the next two years. Until that time, Ms. Reed said the legislature will likely hold back on bills dealing with revenue sharing, or distributing some of the state surplus back to localities.

As for the changing balance of power in the General Assembly, business groups said it won't change their approach to lobbying. Republicans gained control of both the state Senate and House of Delegates for the first time in November.

Business interests have clout in Virginia, Ms. Reed said.

"Virginia is traditionally a pro-business state, it is a pro-economic development state, and consequently it's easier for us to get done what we need to get done," she said.

Lobbyist Ms. Baynard said most business organizations are nonpartisan.

"There are some new faces that we'll have to get to know, but I don't think it will change very much."

Mr. Koelemay said he thinks that if anything, the Republican majority is good for business and technology in Virginia.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide