The Prince George's County budget cuts that trimmed the school system by more than 500 teachers could undercut the county's long-term economic growth.
Although county officials see no connection between the budget shortfall and economic development, some of the nation's leading consultants on the subject say the problem eventually could frustrate Prince George's efforts to attract so-called white-collar industries.
Surveys show that two of the most important factors in companies' decisions to relocate their headquarters or a facility are the general fiscal health of a community and what they perceive to be the quality of life there.
To be sure, quality of life has no precise definition, relocation consultants agree. In general, it encompasses a wide range of perceptions pertaining to cultural activities, social and recreational outlets and most important--for parents of young children--a jurisdiction's education system.
The stability and quality of a school system are "extremely important for anyone wanting to relocate," said an official at a major firm that serves as consultant for company relocations.
"The caliber of public school education ranks among the top three factors that engineering and technical people consider before moving into an area," the same official added.
No one can say with any certainty whether the quality of education in Prince George's County will suffer as a result of teacher layoffs that are being implemented. Some critics of the budget cuts maintain it will.
And as one relocation consultant noted, "I cannot overestimate the importance of perception, and the perception one gets quite often coming into Prince George's County isn't what it is in Fairfax or Montgomery County."
Perceptions don't change very rapidly, and the combination of limited revenues and teacher cuts in Prince George's County is "troubling," remarked an official whose firm has assisted several corporations in relocating to metropolitan Washington.
In his austere budget for fiscal 1983, Prince George's County Executive Lawrence Hogan has given priority to public safety while insisting that the school board cut costs. At the same time, Hogan proposed a small increase in property taxes, raising them to the limit allowed under the TRIM charter amendment that voters approved in 1978 holding taxes to the 1979 level.
Now that the county has finally emerged as a serious competitor in its business attraction program, it may discover that voters and elected officials may have unwittingly weakened its attraction for companies considering relocation.
But county officials reject that notion.
"My reaction to that is nonsense," retorted James Threatte, marketing director for Prince George's County's department of economic development. "Anyone who relates this to economic development is ignorant and practices demagoguery."
In the first place, Threatte argues correctly, economic development marketing efforts aren't dependent on the budget. Moreover, he said, developers have a strong interest in completing planned projects in the county, which already has a strong infrastructure.
Regardless of budget-related problems, Threatte maintains, the county is still a good place to live and has a sound education system.
Prince George's County isn't unique because it has problems, he added. If that were true, he said, "Atlanta would be a sleepy capital."
Nonetheless, given the weight assigned to key factors in relocation decisions, Prince George's County may have to overcome an image problem as it seeks to attract high technology companies and others high on its list.
The Fantus Co., New-York based subsidiary of Dun and Bradstreet Companies and a leading firm in corporate location consultation, has a fairly good idea of what corporate executives look for in new locations.
"Two of the most important considerations for technical or managerial personnel offered transfers are the quality of public education in the new location and the opportunity to obtain quality housing at a reasonable price," says Fantus President Keith Wheelock.
At the same time, says Wheelock, although companies are willing to pay their fair share of taxes for quality services rendered, "their biggest concern is fiscal uncertainty where states or local communities have a pattern of raising tax rates and user rates indiscriminantly to meet annual budget shortfalls."
On the other hand, says Wheelock, low taxes by themselves aren't necessarily an advantage.
Companies are equally concerned, he added, with the quality of education in the public school system "because this affects their ability to attract professional or lower-level personnel to a new location" as well as "quality local personnel."