Maryland to Big Employers: "Go To Hell"

That seems to be the prevailing attitude amongst Maryland's Democratic legislators based on this Washington Times article.

Maryland officials are scaring off investment in the state with such anti-business moves as the court-ordered scrutiny of Baltimore Gas and Electric Co.'s energy rates and the law that forces Wal-Mart to pay employee health benefits, business leaders say.

I'm not familiar with the BG & E lawsuit but the lawsuit against Walmart is particularly telling about Maryland's legislative Democrats' attitude toward regulating what should be business decisions. That legislation is essentially an unfunded mandate imposed on Walmart by the Maryland legislature. This leads to the slippery slope test, Now that they've imposed their will on Walmart, what's to say that they won't impose their will on other businesses? I wouldn't bet against that legislature getting that bold.

He [William R. Burns] said companies are thinking twice about operating in Maryland after Baltimore Circuit Judge Albert J. Matricciani Jr. ordered the state's Public Service Commission to review the utility company's pending 72 percent rate increase and open its books for political leaders. The lawsuit by Baltimore Mayor Martin O'Malley, a Democratic candidate for governor, also succeeded in voiding the energy plan of Gov. Robert L. Ehrlich Jr., a Republican seeking re-election.

It wouldn't be shocking if we found that O'Malley stuck his nose into business that the legislative and executive branches were dealing with. It's likely that he filed the lawsuit in hopes of raising his profile in the Maryland governor's race. What other motivation did he have?

Maryland Secretary of Business and Economic Development Aris Melissaratos, whose chief job is attracting companies to the state, said the judge's ruling was a "huge negative." "I'm often asked why Baltimore does not have more [corporate] headquarters," he said. "This is the answer. It makes my job that much tougher." Mr. Melissaratos also criticized calls by Mr. O'Malley and some state lawmakers to review compensation paid to Mayo Shattuck, president and chief executive officer of Constellation Energy Group, which is BGE's parent company, and financial details of a proposed $11 billion merger of Constellation Energy and Florida utility Florida Power and Light Co. "That is not the realm of legislatures or courts," he said. "Frankly, there are regulatory bodies [such as the U.S. Federal Energy Regulatory Commission] set up to do those things."

That Maryland's Democrats aren't taking the long view of this issue isn't surprising. I haven't seen many Democrats, in Maryland or elsewhere, taking the long view on any issue. Mr. Melissaratos is essentially in the position that California was in under Gray Davis' misrule, though I can't say that Maryland is as bad as California was. Businesses regulated to that extent gets burdensome to the business until it reaches a tipping point. What incentive do companies have to locate to Maryland? A similar situation exists in New Jersey, where taxes keep reaching higher, more businesses relocate to New York or elsewhere and state budget deficits keep getting bigger.

The problem is that Democrats don't seem to view companies as instruments for making money. They'd rather look at companies as instruments of the state, to be regulated 'for the common good' on issues like health care and the like. States with that mentality don't prosper, which is my prediction for Maryland unless it changes its act soon.



Posted Monday, June 5, 2006 1:56 AM

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