Business Leaders Hear Mixed Legislative Update
OCEAN CITY — Resort business leaders got a briefing this week on the recently finished General Assembly session and the overall fiscal health in the town and across the region during a meeting that was at times full of positive energy and at others doom and gloom.
Depending on one’s perspective, the General Assembly session and the associated impacts on the resort and the Lower Shore were largely positive for the most part or extremely negative. The resort’s Economic Development Committee (EDC) this week hosted its annual legislative wrap-up session with a meeting at the Carousel on Wednesday.
Through a prepared statement, Senator Jim Mathias’ aide, Donna Hoy, outlined the many positive bills the senator voted for and a handful of initiatives the legislator pushed on behalf of his constituents.
Delegate Norm Conway (D-38B), who is the House Appropriations Committee chair, said the session this year presented several challenges.
“Every year is a unique year and this one was no different,” he said. “The Senate leadership changed the crossover date and there were some advantages to that, but it put us in a crunch a little bit. It worked out in the end, but a few bills ended up in the drawer.”
Conway said state lawmakers continued to plug away at the state’s structural deficit, but acknowledged there was still a significant gap between revenue and spending.
“The budget is fiscally prudent and socially responsible,” he said. “We promised to reduce the deficit by one third for three years and we’ve done that so far. We ended up with a $400 million deficit in the last year, so that shows there is still more work to be done.”
Conway acknowledged state lawmakers continued to redirect dedicated funds to help close the budget gap.
“Highway user fees took a hit, with about a 90-percent loss for the counties,” he said. “But we were able to restore around $16 million for the counties and that includes $1.4 million in Worcester and Wicomico. It’s become a big issue for the counties.”
For his part, Delegate Mike McDermott (R-38B) launched into a fire and brimstone account of the failings of his colleagues in the session. McDermott started by praising the resort business community for persevering in what has become a difficult economic climate in Maryland.
“I don’t know how you do it in the tough place that Maryland has become,” he said. “In a survey released this week, 50 percent of Maryland’s population said they would move if they could and 12 percent said they would leave this year. That’s not a stat you want to build an economy on.”
McDermott decried his Democratic colleagues for glossing over the state’s structural deficit.
“None of you would stay in this building if I told you there was a structural deficit,” he said. “They talk about reducing the deficit, but they increased spending by $2 billion.”
McDermott also chastised state lawmakers for raiding the Transportation Trust Fund and other dedicated funds in order to balance the budget while increasing spending.
“There is something immoral when legislators take money and use it for something other than what it was intended for,” he said.
McDermott said the resort business community has proven to be resilient in the face of a daunting state economy and more and more taxes and fees.
“As business owners and operators, you’ve established a new normal,” he said. “You’ve established a new base line. The numbers you are looking at now are not the same as they were”
McDermott said the state has to do more to foster a better business climate and limit the intrusions on small businesses.
“We have to do better with the economy,” he said. “What we have offered you is more taxes and fees. The gas tax is getting ready to go up again on July 1 and it will continue to do so. It’s become a regular holiday. The state thinks you have an unlimited capacity to give them what they want, but you don’t have unlimited resources. You know what your bottom line is.”
Following McDermott was not an easy task, according to County Commission President Bud Church, whose outlook was significantly rosier. Church said the economy is showing signs of a turnaround in Worcester and pointed to a few indicators, including the opening of an international business in Bishopville and the robust activity at the nearby Wallops Island space facility.
“They are now planning for manned space flights out of Wallops,” he said. “This is not ‘Star Wars’ stuff, this is actually on the planning books. That’s going to bring lots of engineers and scientists to Worcester. This is not a smoke-stack industry and it’s very positive for Worcester and the Lower Shore.”
Church related the story of the County Commissioners’ trip to New York for meetings with the bond rating companies this spring.
“We had our bond rating increased to AA+,” he said. “Our bond rating is going up while most jurisdictions around the country are seeing theirs decline. That says a lot about how this county is run and we’re very proud of that.”
Church said the county is now in the midst of the budget process and Worcester is again in the unenviable position of facing a significant deficit between anticipated revenues and requested expenditures. He pointed to a decline in the county’s assessable tax base of nearly 25 percent as a major challenge with the budget.
“We’re about $8.3 million short, but I promise you we will not raise taxes,” he said. “That will not happen. It’s going to be a tough road, but we’ll get through it without an increase.”
Ocean City Mayor Rick Meehan was bullish on the outlook for Ocean City and pointed to a large number of infrastructure improvements and other upgrades around the resort. Money has been set aside for street paving and the long-awaited canal dredging project has been funded and is ready to begin.
Meehan said the town’s current $15 million fund balance is up from $12 million just two years ago and the resort leaders are reinvesting in Ocean City. He pointed out the $5.5 million advertising budget and the new marketing campaign and also the $300,000 set aside for the Tourism Advisory Board for special events like fireworks, laser shows and other free family-friendly activities.
Meehan also pointed out a new sports marketing partnership with neighboring Wicomico County to bring major sports events and tournaments to the region.
“That’s going to become a major part of our tourism and marketing,” he said. “They have the fields and infrastructure and we have the hotel rooms. It’s a great example of multiple jurisdictions working together.”
Meehan said all of the investments in infrastructure improvements, special events and other promotions are a sign Ocean City is moving in a positive direction.
“There is a lot of activity and growth in Ocean City both public and private,” he said. “People come here and they’re seeing that. Ocean City is moving forward and we need to make sure we follow through and keep that momentum going.”