St. Mary's vs. Huntsville, AL: Who wins?

(l to r) St. Mary's Chamber President/CEO Bill Scarafia, Smartronix VP Alan Parris and AM Pierce & Associates President Adele Pierce address the Maryland Economic Development and Business Climate Commission

Lexington Park, MD -- When Adele Pierce launched her new business she chose to locate in St. Mary’s County. When her former employer ARINC was bought out she decided to take the plunge and formed AM Pierce & Associates, a woman-owned contracting company. She also has an office in Huntsville, AL.

Pierce drew a stark contrast between doing business in the two locations in a presentation Wednesday to the state commission formed to investigate the criticism that has become a key election issue: Maryland’s business friendliness.

The Maryland Economic Development and Business Climate Commission met all day Tuesday at the Frank Knox Training Center just outside Gate 2 at Patuxent River Naval Air Station. Delegate John Bohanan and former base commanding officer Glen Ives are commission members.

Pierce underscored Maryland tax structure, lack of business incentives for investment and growth and health care costs as the three major impediments to her small business. She said her company was on a growth trajectory since its founding in 2007, but has hit a plateau of 48 employees since the triple whammy of Sequestration, the fiscal cliff and government shutdown.

The new defense climate is one of austerity in which every expense is carefully scrutinized. The Navy and other DoD agencies want more for less from contractors, putting an especially hard push down for small businesses, she said.

So in the current fiscal climate Pierce said she has to take a hard look at which state is more business friendly. “I hope we don’t get to a point of relocation to another state. I don’t want to do that,” she said.

But in making a realistic comparison, Pierce said, “Huntsville, AL has their stuff together.” She pointed out that Alabama’s income tax rates are the 7th lowest and Maryland is number 37 and other benchmarks are similarly disparate.

Several commission members became defensive, noting that Maryland had other quality of life advantages, particularly education. But then they were reminded that earlier in the meeting College of Southern Maryland President Dr. Brad Gottfried pointed out that 60 percent of his schools’ new students need some form of remediation.

Pierce also pointed out the strengths of the University of Alabama at Huntsville. Commission Chairman Norman Augustine wondered out loud how that could be. Other commission members concluded that Alabama must be doing more with less.
Commission member Mary Ann Scully said, “We need to get out of denial. We need to find out what’s great about Huntsville.”

But commission member Del. Dereck Davis of Prince George’s County noted that some locations that may be stars at one point could become victims of their own successes, attracting more people, more infrastructure needs and in the end drive relocation to the next best place.

Pierce’s comparisons between Maryland and Alabama were in response to a question from Ives, who is Southern Maryland Navy Alliance president. Ives observed later than that the state has allowed politics and laws to get in the way of business friendliness.

Smartronix Vice President Alan Parris also noted in his talk that in addition to taxes, Maryland seems to have more regulations that at times “seem like strange requirements for buildings.” He also said that roads, particularly the TJ Bridge, are impediments to his company’s growth. He then quipped, though, that it’s not as bad as Northern Virginia.

Parris also said the state should be doing more to support organizations such as the Navy Alliance and Patuxent Partnership who are working toward the betterment of the local defense industry, the area’s economic engine.

St. Mary’s County Chamber of Commerce President/CEO Bill Scarafia also blasted the state for its attitude towards business. “Most agencies are not advocates, they are enforcers,” he insisted. He added, “We are all in this together. When the ship sinks, we will all sink together.”

Scarafia said the state should have the attitude of “building relationships that are mutually beneficial.”

Also speaking to the commission was Brian Norris, president of Cherry Cove Development. He said, “I feel that Maryland has potential for explosive economic growth,” but added that holding that back was not only taxes but regulatory oversight. He said of regulators, “everyone wants a pound of flesh.”

Norris said small business has a difficult time projecting expenses because of the uncertainty of taxes and fees, He used as an example a 60 percent hike in water and sewer connection charges.

Norris also blasted the State Highway Administration, saying “There is not a culture of working towards an end from state highway.” He concluded, “Their culture is my way or the highway.”

Del. Bohanan in brief comments after the presentations, said, “The grass always looks greener on the other side.” He said St. Mary’s County is “a more mature market in many ways,” when compared to Huntsville. He emphasized the improving education system, with the arrival of the University of Maryland, as an example of the area’s benefits.

Bohanan said, “Expensive places can also be a powerful economic entity,” when the economic activity is translated into innovation and jobs.

The commissioner is expected to make a report of their finding to the Maryland Senate President and House Speaker by the end of the year.

Photo below: Del. John Bohanan with commission member Christy Wiskiel

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