Private-sector pension system study likely to return next year

In the final hours of the 2013 legislative session, a bill that would have created a task force to study the implementation of a private-sector pension system got stuck in committee.

But supporters will likely study the topic on their own this summer and return with new legislation next year, according to Del. Tom Hucker, D-Montgomery, who championed the legislation in the House of Delegates.

Senate Bill 1051, sponsored by Sen. James C. Rosapepe, D-Prince George’s and Anne Arundel, and Sen. Verna L. Jones-Rodwell, D-Baltimore, originally would have invited businesses to join an independently operated pension fund for the private sector.

Supporters cited the bill as necessary to support an aging population while businesses feel it is an unnecessary intrusion.

Hucke withdrew his own version of the bill earlier in the session after a House subcommittee gave an unfavorable report. Hucker’s bill, which allowed for businesses to opt-in to this pension program, was modeled on a similar bill in California.

“I think this is a really serious problem we need to address,” Hucker said. “It’s a new, complicated topic.”

A change is necessary, Hucker said, due to increased anxiety by retirees and soon-to-be retirees, many of whom cannot afford to stop working. A study by the Schwartz Center for Economic Policy Analysis noted four in 10 Maryland workers did not have access to a retirement plan at work.

“I think it’s a real service to small businesses who are interested in having a retirement plan,” Hucker said about the program, adding that it would not cost businesses.

Even without the task force, Hucker plans on studying this topic over the summer, talking to businesses and lawmakers about redrafting legislation for next year’s session.

Tax credit keeps ‘Veep’ filming in Maryland

Crews have begun filming HBO‘s second season of White House comedy “Veep” after a successful first season producing the show in Maryland.

Julia Louis-Dreyfus

Julia Louis-Dreyfus as Vice President Selina Meyer (Photo: HBO)

But the show’s future success in the state may depend on the longevity of a film production tax credit, which will expire in July 2014.

The Film Production Employment Act of 2011 makes up to $7.5 million in tax credits available to film and television productions in the state. The Department of Business and Economic Development administers the credit, which should put 27 percent of film production costs for “Veep” back into producers’ pocket.

Film industry advocates say shows like “Veep” would not come to Maryland without the tax break.

DBED cannot award the credits past July 2014, though, and an attempt to extend the tax credit in this year’s General Assembly session never reached the floor of the House of Delegates after being approved 46-0 in the Senate.

The bill, SB 1066, was sponsored by Sen. Edward J. Kasemeyer, D-Baltimore County and Howard, and increased the amount of total annual credits to $22.5 million while extending the program to July 2016.

DBED estimates “Veep” will have an economic impact of more than $40 million in its second season. Almost 1,000 crew, actors and extras were hired for the first season of the show, which stars former “Seinfeld” actress Julia Louis-Dreyfus.

State takes to YouTube to fight poor business perception

Apparently tired of frequent attacks from Maryland Republicans, who routinely condemn the state’s Democratic leadership for developing a business-unfriendly attitude in the state, members of the executive branch have authored blog posts and editorials telling their side.

And now, the battle has gone to YouTube.

The state Department of Business and Economic Development posted a quirky, two-and-a-half minute video Friday that rebuts the claims of organizations such as Change Maryland that deride Gov. Martin O’Malley for taxing wealthier Marylanders, a practice that the group says has led to a mass exodus of state taxpayers to places such as Virginia and North Carolina.

The group also argues that high taxes have been a major contributor to Maryland shedding jobs in the last several months, causing the state’s unemployment rate to rise from a January low of 6.5 percent to 7 percent.

The video, which has been viewed more than 400 times on YouTube, claims that business people see Maryland as “the land of opportunity.”

It goes on to laud the state’s top rankings in public education and entrepreneurship and says Maryland has the 12th lowest tax burden on new investment. It also cites statistics that indicate the number of millionaires in the state has increased 19 percent since 2007.

And many of the claims made by Change Maryland?

“Absolutely false,” the video asserts.

And that’s “The Truth About Maryland,” according to DBED.

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O’Malley to depart on trade mission with Md. businesses

Gov. Martin O’Malley is scheduled to jet off to Asia this morning with 68 Maryland business leaders in tow to drum up some export and investment deals for the state.

“We’re on our way to Asia for an economic development mission & I’m looking forward to representing MD!” the governor posted to his twitter feed just after 10 a.m.

The mission will spend 10 days total in three countries. China and South Korea are both major export markets for the state, and Vietnam is viewed as an up-and-comer in the region. But, some believe that governors would be better served by traveling to less exotic destinations.

Andrew J. Cassey, an assistant professor at Washington State University, said trade missions are a “pretty risk-free bet,” but said governors should stay closer to home, in places like Mexico, Canada or Germany.

“What does seem to work is going back to your best locations and drumming even more business,” Cassey said. “The best locations for governors to go on these missions are close places, and places that they have a lot of exports to anyways.”

Canada is Maryland’s No. 1 export market, with $1.6 billion in goods shipped to this country’s northern neighbor in 2010. That was good for 15 percent of the state’s exports. The Netherlands was the second-largest export market for Maryland last year and Mexico, the fifth-largest.

But current and former state officials argue strengthening ties to China, and the rest of Asia, is essential, especially now as the state slogs through a slow economic recovery.

“Yes, China is definitely an area that is growing in significance to us. So is Korea,” Business and Economic Development Secretary Christian Johansson said. “If you have the size of the markets, the number of people, the spending power they’ll have in a couple of years, we want Maryland businesses to be a part of that.”

DBED’s Johansson talking up $100M venture fund

Economic Development Secretary Christian Johansson was working the State House lobby between the House and Senate chambers Thursday morning, cornering lawmakers after they wrapped up their quick floor sessions.

“I’m making sure the General Assembly understands the opportunities Invest Maryland offers,” he said in between quick chats with Senate Finance Committee Chairman Thomas M. “Mac” Middleton and Sen. James E. DeGrange Sr., who chairs a pair of budget subcommittees.

“This is the governor’s signature economic legislation,” Johansson said.

The Invest Maryland proposal would fill a $100 million venture fund targeted at high-tech, early stage start-ups by selling tax credits to insurance companies. Essentially, the insurance companies would pay their taxes ahead of time at a discount and the state would use that revenue to fill the fund.

A similar measure was pushed late in the 2010 session, but the Department of Business and Economic Development and legislators disagreed over control of the fund. DBED wanted a 50-50 split, with half of the fund controlled by the department and half by private firms. Lawmakers wanted to put more in the hands of the private investors, who would return principal and some of their earnings to the state.

Invest Maryland will be part of the governor’s legislative agenda expected to be introduced next week.

“We’ve had some good conversations,” Johansson said when asked how his lobbying effort was faring.

Remember those Northrop guys?

Northrop Grumman Corp., the one that got away, has finally settled on a new place to call home.

The defense giant that had drawn multimillion-dollar dowry offers from Maryland, Virginia and the District, chose in April to focus its search south of the Potomac in the fast-growing areas in Northern Virginia. The company chose a building near Falls Church on Monday, The Washington Post reported.

The Post’s story offers a few more clues as to what Northrop was looking for, and why Maryland didn’t fit the bill. The company’s decision has been influenced all along by the size of the buildings available, their locations and the incentives doled about by different jurisdictions.

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WaPo columnist: Md. on “fool’s errand” in Northrop race

If you haven’t read Steven Pearlstein’s column on the capital region’s Northrop Grumman arms race, stop daydreaming about your NCAA brackets and check it out now. It’s a really interesting look at a side of the process that hasn’t seen much light. (I meant to post something on this days ago but it got lost somewhere in the Internet tubes.)

There have been reports about a $25 million deal on the table from the district, potential locations in Maryland and Virginia and what landing the defense giant means for all three locations. The Washington Post’s Pearlstein, who says all three jurisdictions will match the highest offer, looks at what it all means for Northrop. (Hint: not much).

At $34 billion, Northrop had more revenue last year than Maryland will spend this year. And it’s operating profit is easily larger than the $2 billion deficit Gov. Martin O’Malley had to fill.

Luring Northrop to Montgomery or Prince George’s would be a nice feather in O’Malley’s cap come election time in November. The governor has made job creation his top priority this year and with the economy on everyone’s mind, Republican lawmakers have been quick to criticize him for being late to the table.

Of course, it could cut the other way for O’Malley. Dishing millions to a corporate giant could provide more ammunition to opponents who have decried what they perceive as a lack of fiscal discipline in Annapolis. Or fuel accusations of outright corporate welfare. It’s happened before.

For Pearlstein, what makes the subsidies all the more foolish is that he believes Northrop will land in Virginia.

He says a site in the Rockledge Office Park in Bethesda is too close to Northrop rival Lockheed Martin. Plus, it means a trip down I-270 every time a Northrop exec needs to meet the brass at the Pentagon.

About the new mixed-use development in Prince George’s he writes:

“What about National Harbor in Prince George’s County? Somehow I just can’t see the Northrop brass mixing it up with the tool-and-die salesmen from Peoria attending their annual convention at Gaylord’s.”

Ouch. I’m not sure who comes out worse, Maryland or Peoria.

On tap for Tuesday, Feb. 2

Gov. Martin O’Malley will give his State of the State address at noon today before both houses of the Maryland General Assembly and other assorted state government poobahs.

If this speech follows O’Malley’s recent public remarks — and those made by President Obama in his own state of… speech — we can expect to hear a lot about jobs the economy today.

The governor has put initiatives billed as job creators at the top of his legislative agenda for 2010 and has made a mantra out of “jobs, jobs, jobs” in his recent speeches.

A programming note, this is the third date set for O’Malley’s speech. His first, last Wednesday, fell on the same day Obama was to deliver the State of the Union. The second date, Feb. 4, happened to be the day Baltimore Mayor Sheila Dixon will resign from office facing her lengthy legal battle.

Also on tap today are hearings before a Senate committee on a pair of tax credits. The first, one of O’Malley’s bills, would give businesses a $3,000 tax credit for each unemployed Marylander they hire. Businesses would be able to claim up to $250,000 each, and the program would be capped at $20 million.

A second bill, introduced by Sen Alex X. Mooney, a Western Maryland Republican, would revamp the state’s film production incentive program run by the Department of Business and Economic Development. Mooney’s bill would shift it to a tax credit worth 30 percent of certain filming costs. Some productions, like broadcasts of sports games, and costs, like salaries over $1 million, would be exempt. So, sorry Tom Cruise, or whoever has to pay Tom Cruise.

Senators question DBED over loan fund

Tucked into the raft of economic development and job creation initiatives on the table this year in Annapolis is a relatively innocuous looking bill that would shake up a small business loan program run by the Department of Business and Economic Development.

DBED, in legislation introduced in the Senate, is shift oversight the Maryland Economic Adjustment Fund and broaden the scope of the program.

The fund was created in 1994 to give loans to small businesses – primarily defense contractors – that were negatively affected by military base closures and realignments. It was administered by a commission appointed by the DBED secretary.

“It’s a critical part of our efforts to make sure that we help small businesses grow and be successful,” said Secretary Christian Johansson.

The fund has about $450,000, but DBED is seeking up to $5 million more from the federal government.

Under the changes submitted by DBED, control of the fund would shift from the commission to the secretary or other DBED officials he appoints. The loans would also be available to a wider range of small businesses because the defense provisions would be stripped out.

Members of the Senate Finance Committee questioned taking control of the fund out of the hands of the commission, which would be required to open its meetings to the public.

Ellen Valentino, Maryland director for the National Federation of Independent Business, said after the hearing she thought the changes to the program need “to be tightened up.”

“The merit of the fund seems to be well-intentioned,” she said. “The oversight seems a little loose.”