Donald Fry: Remember the value of business after the election

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By Donald C. Fry

Candidates for virtually any elected office in the upcoming election are proclaiming their support for “jobs, jobs, jobs,” implying that they fully recognize business’ core value to the state and local economies as the primary generators of jobs.

This is a good thing and, as a business advocate, I’m glad to see these sentiments expressed in an election campaign.

However, in just a few short months, Maryland’s elected officials will begin a General Assembly session in January 2011 facing a stimulus-free $2 billion deficit. When they do, I sincerely hope that they will remember their pre-election, business-appreciation and job creation message points.

That’s because what often happens as state lawmakers grapple with looming operating budget deficits is that businesses find themselves as the center of the tax crosshairs.

For example, closing perceived “corporate loopholes” is a perennial favorite subject in Annapolis. Currently a state business tax reform commission is considering raising corporate taxes and enacting other measures that could directly impact our business climate. Among the studies in front of the commission is an academic report that, believe it or not, suggests that our state’s business climate would be better off if taxes were raised and business incentives were reduced.

From what we all know about business and the economy, it is still beyond belief that anyone would logically give that conclusion much serious thought.

Of course, elected officials have a right and a duty to examine all options for closing deficits and ensuring that government is efficiently operated.

But, to me, there is something fundamentally perplexing about the prevailing attitude among many office holders who seem to view businesses as wealthy adversaries instead of job generators and economic engines.

In Maryland, this attitude is articulated by lawmakers who are fond of saying that they care more about “Main Street” than “Wall Street.” In an economy and a nation based on business investment and a vibrant private sector, it is hard to fathom that some in elected official think it is a positive notion to suggest that “businesses are bad.” But, taxing business is often portrayed as the logical first step in any budget balancing or revenue-raising process.

Conversely, that would mean – for our employers, manufacturers and sellers of our products, providers of our services and, oh yes, the companies in our 401-K portfolios – that increasing their business costs is inherently good?

Do we really believe that?

Or is it just that, when we’re putting together government budgets, we suspend belief in what we know is the reality -- that businesses provide jobs and opportunity for people …

… And that a healthy business environment nurtures job creation and opportunity;

… And that the relationship between business and taxes is generally inverse – higher tax rates generate more business overhead thus generating less available money for business investment – something that the state, in the long-run, needs more than increased revenue for the general fund to get through the next fiscal year.

I think we all inherently know that private sector business drives the economy. We just need to remind ourselves once in a while that we live in and enjoy a free market system where business is not the enemy.

But all too often, as history has shown, the end result is that elected officials when faced with a challenging budget choose to increase business taxes and costs because it is the more politically acceptable option and certainly preferable to either raising taxes and fees on the voting public or reducing government services.

Let’s hope that in the future as these same decisions unfold, that our elected leaders remember and live up to their 2010 campaign mantra of “jobs, jobs, jobs.”

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

Previous Center Maryland columns by Donald C. Fry:

New report ranks Baltimore among stronger regions to weather the recession

New living wage proposal: wrong idea, wrong time for Baltimore

Northeast needs more attention from federal rail planners

New national report has familiar ring for Maryland bioscience advocates

New report underscores Maryland’s work force development challenges

State’s health initiative: a ‘win-win’ for employers and their workforces

As Baltimore hikes taxes, are state’s counties next?

After the ‘fiber from heaven’ scramble, what’s next?

BRAC growth no longer a future event – it’s happening now

Economic development is a contact sport

Despite the recession, bioscience growth still percolates in Baltimore

State stumbles in enacting new education collective bargaining process

Wind power has potential in Maryland, but solar emerges as early renewable option

It's not good to be clueless in cyberspace

Amid fiscal shuffle, Maryland lawmakers pass measures to spur business growth

Thankfully, Baltimore leads with substance over style in luring Google

Leave damaging transportation provisions out of the budget

Amended budget continues recession-induced fund shifts and stimulus rescue

General Assembly setting stage for combined reporting push in 2011

Wrong timing for proposal to change Baltimore City school board

Baltimore City isn’t alone in facing pension funding challenges

A government investment program that delivers

Proposed transportation fund raid -- a bad habit continues

Where's the outrage over crime?

Small business is where innovation lives
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Donald C. Fry has been the president and CEO of the Greater Baltimore Committee (GBC), the central Maryland region's most prominent organization of business and civic leaders, since November 2002.

Under Don’s leadership, the GBC is recognized as a knowledgeable and highly credible business voice in the Baltimore region, Annapolis and Washington, D.C. on policy issues and competitive challenges facing Maryland. Its mission is to apply private-sector leadership to strengthening the business climate and quality of life in the region and state.

Fry served as GBC executive vice president from 1999 to 2002. From 1980 to 1999 Fry was engaged in a private law practice in Harford County. During this time he also served in the Maryland General Assembly. He is one of only a handful of legislators to have served on each of the major budget committees of the General Assembly.

Serving in the Senate of Maryland from 1997 to 1998, Fry was a member of the Budget and Taxation Committee. As a member of the House of Delegates from 1991 to 1997 Fry served on the Ways and Means Committee and on the Appropriations Committee.

Fry is a 1979 graduate of the University of Baltimore School of Law. He earned a B.S. in political science from Frostburg State College.