Nearly two years after the exodus of Fairchild Industries from the state sent shock waves through Maryland's financial community, businesses still face some of the high government costs, "inconsistent and outdated" regulations and poor state planning that reputedly prompted the giant industrial firm to leave, according to a new study by 100 economic development experts.
"We're no more competitive than we ever were," said Richard Story, an officer of the Maryland Industrial Development Association (MIDAS), a nonprofit group of public and private economic development planners that prepared a 32-page analysis of the state's business climate.
The report, which MIDAS members are expected to approve at their annual meeting here on Tuesday, says that Maryland's image as a place to do business made only "moderate" improvement since 1983, when Fairchild and AT&T left Maryland and its "restrictive regulatory climate" for Virginia.
The report praised the Department of Economic and Community Development for offering a toll-free phone line and using television advertisements featuring Gov. Harry Hughes to attract and retain businesses. But it criticized the governor and the legislature, saying economic development must become "a top priority of state government."
"The good news is we didn't slip against competing states, but the bad news is we haven't gained appreciably, either," said Story, assistant director of a Baltimore research firm. "Maryland is average, but average isn't good enough."
MIDAS is scheduled to publicly issue its report just hours after Hughes is to name a new secretary to oversee the $64 million-a-year economic development department. Hughes has asked Thomas H. Maddux, a Baltimore business consultant, to replace Frank J. DeFrancis, who won high marks from the business establishment during his 11 months as economic development chief.
The report, which focuses in part on the period when DeFrancis was secretary, noted that in 1983 a survey ranked Maryland's business climate 27th in the country, while neighboring and competing states, including Virginia, the Carolinas, Texas and Florida scored higher.
The factors cited in Maryland's lower rating -- government costs, higher corporate income taxes and outmoded regulations -- "have all contributed towards the negative perception of Maryland's business climate," the MIDAS report said.
"There's definitely room for improvement," said MIDAS President R. Frank Collins, chief of economic development in Howard County.
"Take regulations like the double registration of cars," said Collins. "Why would a New Jersey business executive want to move down here when he bought and registered his new $15,000 car in that state -- and then has to do it again in Maryland. That's an example of a regulation that should change."
State Sen. James Clark Jr. (D-Howard) has filed legislation to abolish that regulation, Collins noted.