The State of Maryland benefited from $1.1 billion in new business investments last year, up from $228 million in 1978. This year it hopes to do better, according to James O. Roberson, secretary of the state's Department of Economic and Community Development and a man who played a major role in bringing about that growth.
He and three Maryland legislators discussed past successes and future investment goals today at the closing session of the Maryland Bankers' Association. For the record, Roberson said the state had paid his way here, not the bankers.
The single most significant newcomer to the state last year was General Electric Information Systems, which plans to invest about $100 million in the state. G.E. settled in Montgomery County, as did Southern Pacific Communications, which plans to build a $70 million facility.
With its economic development budget increased from $10 million to $17 million this year, Maryland is eagerly courting both foreign and domestic business. This Saturday Gov. Harry Hughes and aides will open a development office in Tokyo, the state's first foray into the Far East. Maryland wants to get its share of Japanese high technology companies that have discovered they can manufacture and assemble their products more economically abroad.
In addition, the state hopes to lure second generation Japanese firms away from California. Roberson said California-based companies have complained about a shortage of young engineers because recent college graduates cannot afford to live there.
Maryland expects to receive reciprocal visits from Japanese and European trade delegations this year and next. Although Roberson did not give any specific commitments the state may have obtained thus far from Maryland officials' trips abroad, he mentioned that the state is trying to attract manufacturers of auto supplies and health care equipment.
The banker, skeptical, asked Roberson how the state, with its high tax rate, expected to attract new industry. Roberson said one inducement to business to relocate in Maryland could be recently passed legislation enabling counties to offer tax incremental financing. This method, successfully used in California, Minnesota and Wisconsin, is aimed at reviving blighted areas. Taxes are frozen at current levels and bonds are issued in anticipation of future taxes generated by new industries locating there. The bond revenues are used as up-front developmental funds.
The other legislators, Sen. Jerome Connell, Sen. Harry McGuirk, and Del. John Hargreaves, agreed that the chief impediment to industrial development in the state is not high taxes or wages, but over-regulation, such as a noise violation citation slapped on Kelly Springfield Company, which has been doing business in Cumberland for a century. State inspectors found that the decibel level emanating from the plant at 11:20 p.m. was equivalent to that of normal conversation at four feet.
The legislators called this a case of harassment, since none of the citizens living nearby had complained. The manufacturer will undoubtedly get an exemption or win an appeal, McGuirk observed, although not without costly, time-consuming legal effort.
The legislators took some blame for creating the agencies that created the regulations that created the bottlenecks for business. A bill enacted this week gives the bureaucrat charged with coordinating business permits the power to act at last, after four years "with nothing to do," said McGuirk. The coordinator will now be able to "tell the bureaucrats how long they have to approve applications."
On another subject, moderator Robert F. Tardio, chairman of Suburban Trust Company, was asked by a Bermudan banker his prognosis for interstate and international banking. Tardio expalined that interstate branch banking is an extension of the universal credit system engendered by the money card. However, he said regional banking -- as proposed on the money card. However, he said regional banking -- as proposed on the association of bank holding companies and particularly state-to-state reciprocity -- would precede it.
"The big money center banks really don't have the clout" to get a vote through Congress on this controversial issue, which is opposed by many small banks nation-wide. As for the chance of a Bermudan bank in Baltimore, Tardio replied, "I don't see a great movement for international banks locating in Maryland now."
The association elected Henry S. Baker Jr., Maryland National Bank in Baltimore, its new president.