ANNAPOLIS — Lawmakers are hoping to use tax incentives to lure manufacturers to relocate or expand in Maryland.
A bill sponsored by Sen. Roger Manno, D-Montgomery County, would offer 10-year credits to some manufacturers as part of an effort to reverse a trend in declining employment in the sector since 2004.
But some industry experts, while applauding the effort to attract manufacturing jobs, question the strategy.
“I’m not sure it pays off,” said Michael Galiazzo, president of the Regional Manufacturing Institute, adding that the cost of the credits is often hard for state and local jurisdictions to recoup.
“We need to come up with new models other than giving things away,” Galiazzo said. “We’re doing the same things as everyone else. It’s doesn’t help distinguish us.”
Manno was not immediately available for comment.
The bill would establish 10-year property and payroll tax credits for heavy manufacturing operations — construction, mining, metal refining — that relocate to or significantly expand in a designated manufacturing zone.
The zones would be established by the Maryland Advisory Commission on Manufacturing Competitiveness. The commission could establish up to six per year with no local jurisdiction being eligible for more than two a year.
The bill also requires the Office of the Comptroller and the Department of Business and Economic Development to provide annual reports on the effectiveness of the program.
The incentives are in some ways similar to those being used to attract manufacturing jobs to New York.
New York is one of five states whose manufacturing industry health received a grade of F, according to a 2014 Ball State University review of U.S. Census and Bureau of Economic Analysis data.
Maryland is one of 10 states with a grade of D, according to that same report.
“It’s like an auction — you’re always bidding against the next lowest bidder,” Galiazzo said. “We need to work closely with local government and their economic development departments to create a climate of competitiveness where companies can compete globally.”
Galiazzo said improving the regulatory climate in the state could help attract manufacturing jobs.
“There are so many things preventing manufacturers from coming to Maryland and growing,” he said. “We need to be a lot more sensitive to the environment that manufacturers operate in.”
Jeff B. Fuchs, chairman of the commission, said he is still reviewing the bill to see how it fits in with the charter of the advisory panel.
The 25-member panel is tasked with advising the Department of Business and Economic Development how to improve manufacturing competitiveness and upgrade worker training and the viability of the industry within the state.
Galiazzo said he’d like to see a system that leverages the state’s top ranking in research to create manufacturing jobs.
“All of the research is with the idea that a product will eventually be made,” Galiazzo said. “If it’s invented in Maryland should be made in Maryland.”