The Gazette

Ehrlich lets loose

by Thomas Dennison
Staff Writer

April 23, 2004

Gov. Robert L. Ehrlich Jr. waits to be introduced at Thursday's Maryland Business for Responsive Government luncheon. About 350 people attended the event.

Blasts business community for failing to leverage its influence

BALTIMORE -- Claiming he is tired of being a "backstop," Gov. Robert L. Ehrlich Jr. took the Maryland business community to task Thursday for failing to keep anti-business bills from passing the legislature and for being too passive in holding lawmakers accountable for casting anti-business votes.

Thursday's speech to nearly 350 business leaders, lobbyists and lawmakers at a luncheon sponsored by the Maryland Business for Responsive Government surprised many of the attendees and offered a glimpse of Ehrlich (R) that has been seldom seen in his first two years of office.

Using a sharp tone that seemed to pierce through the massive ballroom of the Baltimore Convention Center, Ehrlich cast himself as the leading voice of Maryland business. He alternately rallied and reprimanded the business community for relying on him too much to veto anti-business bills. Rather, he said, the business community and its high-paid lobbyists should make sure tax bills and other bills that infringe on business never make it through the legislature.

The governor described himself as a "backstop" preventing anti-business bills from becoming law. If the business community is going to be successful, he reminded the group, it could not have a better advocate in the governor's mansion.

"You now have a backstop, but that's no excuse," Ehrlich said. "This administration is there to kill bad bills during the session and to veto bad bills after the session, and that's good."

But most importantly for the business owners and lobbyists in Annapolis, he said, legislators need to understand and feel the consequences of voting against business interests.

"The business community has yet to achieve its goals," Ehrlich said, adding that business will be successful only if it becomes "dangerous."

He urged the assembled leaders to emulate the Maryland State Teachers Association and the trial lawyers, two groups he often clashes with but credits as being extremely effective in Annapolis.

Ehrlich's speech drew thunderous applause at the beginning as he drew sharp contrasts between his administration and what would have happened if he had lost the 2002 election.

The audience drew quieter, however, when the governor launched his indictment into the business community's ineffectiveness with the General Assembly.

Business is a "powerful player" every four years around election time, he said, and it should not pony up campaign cash to lawmakers who simply pay them lip service and vote against their interests.

Ehrlich's speech fulfilled the promise made by some of his key aides that the business community was in for a good old fashion tongue-lashing after many anti-business bills managed to pass through the legislature this year.

Ehrlich and his administration were disgusted that the House rammed a $670 million tax package through the chamber in the matter of days.

House Speaker Michael E. Busch (D-Dist. 30) of Annapolis, cast by Ehrlich and his allies as the main culprit for pushing tax increases that hurt businesses, disagreed that the business community is under assault.

"The idea that the business community would be hurt by the House is fallacious," said Busch, who did not attend the luncheon. "I would hope the business community would step up and try to be part of the solution to our budget problems and make sure local governments and higher education institutions, which are both important to the business community, aren't hurt by the governor's budget cuts."

Ehrlich's aides cited the living wage initiative as an example of the business community's ineffectiveness. The bill was opposed by business -- and strenuously by the Ehrlich administration -- but passed in the final days of session. Ehrlich has promised to veto the bill, which requires state contractors to pay employees $10.50 an hour on contracts of $100,000 or more.

An Ehrlich aide drove the point home after the speech. "For many years, all businesses large and small have been wonderfully sidelined in Annapolis," said Chief of Staff Steven L. Kreseski. "It's time for them to start using their clout."

After the speech, Kathleen T. Snyder, president and chief executive officer of the Maryland Chamber of Commerce, said she understood Ehrlich's message that the business community needs to be more forthright in their advocacy, but she disagreed that the business lobby has fallen into complacency.

His message "could have been put in more positive terms," Snyder said. "The governor ought to be more supportive of organizations like the Maryland chamber, which has become bold. ... We've become dangerous.

"I take that [Ehrlich's speech] as perhaps a governor not recognizing what some of us did."

She said that it was the chamber -- not the Ehrlich administration -- that testified against the living wage bill in the Senate.

Greater Washington Board of Trade Lobbyist Len Foxwell said that the board worked cooperatively with the administration on passing bills that will work to clean up the Chesapeake Bay and replenish the transportation trust fund.

"The most important factors that drive business decisions in this region are the quality of our workforce, our transportation network and our quality of life," said Foxwell, who was not at the luncheon. "I think we made real progress on these issues this year."

Ehrlich's speech foreshadows his first round of vetoes. The living wage bill and a bill that would increase corporate taxes to offset college tuition increases -- both opposed by the business community -- are expected to be vetoed.

Ehrlich also "is inclined to veto" two bills that would close a loophole in Maryland's tax law that allows companies to set up shell operations in Delaware to avoid paying Maryland taxes, Economic Development Secretary Aris Melissaratos said.

One bill that closes the loophole holds $14 million in economic development money hostage if the governor vetoes it; the other would give businesses with out-of-state holding companies who come forward a kind of tax amnesty, a provision deeply offensive to Comptroller William Donald Schaefer (D), an Ehrlich ally.

"Ideally, we want to veto both bills, but were concerned about the money [the legislature] is holding over our heads," Melissaratos said.

But the bottom line for business, he said, is that "legislators need to know they will be punished for how they vote. They need to know they will pay a price."