From John Mallamo of Bel Air:
Mr. Chris Streett, spokesman for the Harford County Economic Development Advisory Board recently delivered as elegant a pleading for the Board’s activities and its program as ever I have read, anywhere. It was a fine letter, very polished and professionally done. I am a bit embarrassed to say though, that the missive while long on eloquence was short on substance. It did not provide sufficient information required to make an objective decision on the merits of its claims.
The description of a new way of thinking does not really bring us into the present. Quite the contrary it is a throwback to the past. The approach proposed is a derivative of classic Keynesian economics, and an extension of President Lyndon Johnson’s great society economic programs configured for the private business sector. It is uncanny that the more things change the more they look like things that have been tried in the past. Sadly, not all of those efforts were successful, and it would be foolish to expect that they would work now. As a very prominent politician once observed Socialism is a great system until you run out of other peoples money to spend.
Harford County certainly does need to be competitive when seeking to attract new business. Harford County needs to let interested business know that we treat our residents with respect. That our government is open, forthright and honest with its residents. It meets their needs and requirements. Its policies promote legitimate enterprise. Businesses moving must know that they will be treated no differently than those that have been here much longer. Monetary incentives will not entice business, when they know that policies are not fair to everybody equally. Business expects to move to a location where the government is based on good governance, effective government and efficient operations.
Certainly it is costly to do business in Maryland. Interestingly, it costs as much for old businesses to do business in Harford County as it would for a business moving in. Yet some of our businesses have been here for years, decades even. It is no less expensive for our residents. State taxes are high, some of the highest in the country. If you want to pursue a new way of thinking, take a message to Annapolis. Tell the Governor and the General Assembly that the new ways they think of to raise taxes annually and their policies are killing our chance to attract business. Harford County Real and Personal property taxes are high, too, some of the highest in the State. Tell the County Executive to find a way to reduce those taxes. The County Executive and the County Council have already shown that they can do that. They can do it again. Business like assurance and certainty that taxes will remain low. That is what they use to determine their cost of doing business and their bottom line.
Regardless of where the money for incentives originates, it comes from tax dollars. The Federal government does not generate enough money from any its programs to fund its incentive programs. The State does not generate enough money from any of its operations to fund its incentive programs. Harford County assuredly has to raise taxes and even that is no guarantee that incentive programs can be funded. In reality money for incentive programs originates from wallets of every resident in Harford County. That contributes to the tax rate that affects the bottom line of any business new or old in Harford County.
If you truly believe that monetary incentives are a pillar of any program necessary to attract new business, then here is a suggestion. You and all the other members of the corporate community who decide who should get those incentives now, form an investor group. Use your own private funds to underwrite those incentive programs. Distribute them as you determine best meets your requirements. Call me if you find something that is truly interesting, I and probably other Harford County residents may invest with you. That is what capitalism, the pillar of one of the greatest economic engines in the world, the American economy, is all about. People put up their own money, and get a return on investment. Using government money to fund private ventures is called Socialism. Many of the countries in the European Union are discovering that Socialism as an economic policy is severely limited. Why should we believe that it will work better here?
It certainly were a fine letter. Very polished and professionally done.
John Mallamo
Mr. Streett has fine words; however, there is no substance.
Bravo Mr. Mallamo , Bravo.
Well said and yes, a very fine letter.
Isn’t John Mallamo a retired governemnt employee with a pension?
If that were true would it matter in the context of the subject here? This is about taking tax money in an effort to bribe businesses into relocating to the area and has nothing to do with the author’s past employment status.
Most commentary on the Dagger seems to go pretty far into the comment count before someone makes a useless & irrelevant point. Mr. Bee took us down that road early this time…
Excellent letter. Unfortunately the citizens of MD have proven time and time again that they are very happy with their politicians. That fact is evident in the way they elect the same buffoons and lackeys over and over. Most thinking taxpayers should be against any bribe to get a business to locate here but I’ll bet that after all is said and done the same politicians will be reelected. And if something strange happens and they get voted out then they can always get a sweet job with the very businesses they gave our money to.
Well said, Mr. Mallamo. I couldn’t agree more.
Can someone clarify for me what “incentives” the lettter writer is addressing?
Here is the latest example :
http://www.daggerpress.com/2012/07/18/harford-campaign-for-liberty-calls-county-council-vote-wealth-redistribution-from-harford-maryland-taxpayers-to-large-multi-million-dollar-multi-national-corporations/
“When businesses thrive, taxes are lower, jobs grow and a healthy community results.” Interesting proposal in Mr. Streett’s letter on the benefits accruing to the activities of the Economic Development Advisory Board. The reality is that taxes are lowered when governments spend less money. Businesses thrive when taxes are low and predictable. Perhaps the Economic Development Advisory Board could take that message to Annapolis and Bel Air, rather than proposing more government spending in the form of investment incentives.
Richard Schafer
I would like to express my appreciation to Mr. Streett for the response from the Harford County Economic Development Advisory Board regarding the economic development policy of Harford County. His letter dated August 16, 2012 was published by the Aegis and is also available in explore harford.com.
Mr. Streett’s comments were a favorable affirmation that what was requested by the Citizens of Harford County Watchdog Committee was in fact being done by Harford County. I was disappointed that while in agreement with the committee’s requests none of the requested information was provided. His letter of course spoke well of the work done by the Harford County Economic Development Advisory Board. It did not provide any work product of the Harford County Economic Development Advisory Board.
After reading Mr. Street’s comments I was still unable to determine if the Harford County Department of Economic Development is operating in the best interest of the taxpayers. Missing information included a discussion of the policy guidelines as outlined by the Citizens of Harford County Watchdog Committee. Those guidelines appeared very important to the success of the program. I have copied those guidelines which are as follows:
1. A positive benefit to the community.
a. Jobs are gained at all skill levels.
b. Income tax revenues are enhanced.
c. Intangible items including continuance of the enterprise and cost of services make the investment a net return to the taxpayers.
d. There is a need for the product or service within the jurisdiction.
2. The policy does not become a standard matter of doing business.
3. No other existing business is affected in a loss of competitive position.
4. The enterprise is not financially capable of opening a new facility without assistance.
5. The taxpayers are rewarded by reductions in the property tax rate brought on by the profitability of the sponsored enterprise.
6. The enterprise is not currently receiving its revenue from taxpayers.
7. There is a reporting process whereby the recipient provides information about the use of funds and its job creation results.
Recent economic conditions have caused the management of many businesses to enact severe cost cutting measures in order to survive. Profitability is becoming increasingly difficult as companies restructure in order to maintain their gross margins. Both business and households are struggling and this no doubt has caused a fiscal drought to the tax revenues of government.
I am concerned that this is not the right time to spend taxpayer’s money with regards to economic development. Is it not enough that defense concerns who have benefitted by BRAC and therefore relocated or began operations in proximity to APG, a designated enterprise zone, are also provided more economic assistance in the form of grants and loans? These companies in the defense industry are already making profits from taxes paid at the federal level.In times like these the selection process of who receives Economic Development Assistance must be studied very carefully. A balance must be achieved that considers Conserving Taxpayers Money during this period of Fiscal Drought while providing economic assistance only when the reward to taxpayers is maximized.
With regards to Ideology the comments by Mr. Mallamo are a matter to reflect upon. It is important to distinguish between what is good and fair economic policy and what appears to be Socialism. There is a dividing line. With capitalism comes fiscal responsibility. Loans are to be repaid not forgiven. No industry or group regardless of size is treaded any different from another industry or group. Mr. Mallamo has stated in his letter that all should be treated fairly. Maintaining substantive regulatory oversight and economic sensibilities should prevent systemic economic events from occurring. An economic development assistance entitlement should not become a distribution of wealth from the taxpayers to some privileged group.
I would like to address specific comments in Mr. Streett’s letter by asking the following questions.
• Will Harford County release reports by participating companies? These companies are required to report on their use of funds and the results.
• When Harford County matches the dollars of a state economic development program is the County under any obligation to participate? Is Harford County being forced to approve any economic assistance originated by the state or face never receiving any state funds?
• To achieve the goals of the Office of Economic Development the Harford County Economic Development Advisory Board needs to have the cooperation of existing businesses, county government, civic groups and individuals. In Harford County retail opportunities have been expanded and economic assistance has been extended to 82 defense contractors. Why is state and county money going to companies that are already receiving federal funds for their products and services? Are there not better qualified company’s also seeking economic assistance such as small business? Please name the companies that have expanded retail opportunities. Are any of the companies that have expanded retail opportunities small business that have a history of operations and service in Harford County?
• The Harford County Administration, Harford County Council and the Office of Economic Development, with the assistance of the Economic Development Advisory Board, have studied and created a number of distinct programs for companies of all types and sizes. Please provide the details of each distinct program. Please describe the requirements for participation, selection and reporting. Who are the variety of members of the corporate community who make the selection?
Regarding when a public hearing is held regarding the request for economic development assistance and the county council is voting to approve the hand out I would suggest the following:
1. Cite the evolution of the request…When was it submitted. What distinct program qualifies it. How does it comply with each of the guidelines referenced in the Citizens of Harford County Watchdog Committee letter and as listed above.
2. Who in the corporate community has made the selection. What was the committee vote.
3. How will the recipient provide compliance reports.
4. How will Harford County disclose this in their annual audited report.
5. Exactly state what the financial benefit is to Harford County. How does that benefit compare to the cost of the economic development.
6. Please have the Harford County Council aware of these facts. Any decisions made should be based on the facts. There should be no misunderstanding by the Harford County Council over the payoff. There should be no comparisons to events either locally or nationally outside of the particular entitlement. There should be no endorsement of the products or services, as a single statement or as an infomercial, of the company being considered for the entitlement. The Harford County Council must have complete knowledge and understanding of the recommendation. Their vote should be based on what the benefit is to Harford County. It should not be based on factual incorrectness, political beliefs, and product endorsement.
I with all due respect do not agree that Harford County is already doing what has been requested of them. Issues remain such as the following:
• What is the net financial benefit and social benefit to Harford County.
• There remains issues as to informing the public as to how a particular company has come to be recommended for economic development assistance.
• There remains issues as to exactly what matters are taken to assure compliance and what actions are taken if compliance is not met.
• There remains a lack of disclosure on the part of the county that describes the nature of economic development assistance.
• There remains a lack of disclosure of after the fact fiscal reporting regarding programs that use taxpayer resources for payment of government sponsored borrowings.
• There remains a lack of disclosure regarding property tax revenues that may or may not be sufficient to meet debt service requirements and the cost of basic government services.
• There remains a complete lack of accountability of whether the recipient has provided the goods as promised and that were the cause for receiving the economic development assistance.
In conclusion the comments by Mr. Streett are appreciated but they gloss over an area that needs more critical analysis. The purpose of my letter is to determine if Harford County Government is being fiscally prudent and responsible and to determine if the views and concerns of the people of Harford County are being properly represented. There appears to be much that is not understood regarding when the county participates with or matches state grant and loan funds. The Harford County Economic Development Advisory Board needs to learn more about this matter and share that understanding with the Harford County Council. The advisory board also needs and spend more time with the Harford County Council to exchange information on matters of economic development assistance.
The comments by County Executive Mr. Craig in his letter to Joan Ryder regarding specific concerns about the Office of Economic Development expressed by the Citizens of Harford County Watchdog Committee are inaccurate and harsh. They offer nothing as a response to information that should be provided to the taxpayers of Harford County. I have read County Executive Mr. Craig’s letter to Joan Ryder in which he calls this objective a covert operation. Mr. Craig calls this form of interaction with local county government as not being a characteristic of a democracy. Mr. Craig response is very peculiar and distinctive only to himself. The County Executive should encourage input from the community. To paraphrase Mr. Streett, to achieve the goals of the Office of Economic Development, the Harford County Economic Development Advisory Board needs to have the cooperation of existing businesses, county government, civic groups and individuals. That cooperation will promote better decisions and transparency regarding economic development policy.
Respectfully,
Larry Kramer
Maybe now the County Executive can take a break from his civics tutorials and his search for those nefarious covert capitalists, the Economic Development Advisory Board can break away from finding new ways to pass our tax dollars and deciding who will get what, and the Office of Economic Development can get over being tired of handing out money to answer the questions I submitted.
I am still wondering who knows where the money goes?