Monday, September 23, 2013

Taxes and Regulation will limit Maryland's Wallops Island boom

I've written about space policy and how it relates to Maryland before, but today's Baltimore Sun ran an editorial about Maryland's opportunity for another piece of the pie. The editorial writers have capitalized on the recent satellite launch from the Wallops' Island facility on Virginia's eastern shore, and note the following:

That distinct possibility represents an economic coup not just for Virginia but for Maryland as well. A stone's throw from Chincoteague and Assateague islands, Wallops has long been closely linked to Maryland's Eastern Shore, drawing workers from nearby Worcester, Wicomico and Somerset counties. The benefit to the region is significant — more than 1,600 jobs and nearly $400 million in economic impact, according to a 2011 Salisbury University study.
Such jobs are a prize worth pursuing. From entry-level technician to lead scientist, they are held by highly paid, highly skilled and highly educated individuals. Should Cygnus succeed and land a long-term NASA contract, the sky may literally be the only limit. The Wallops spaceport could support many more such public-private partnerships in space exploration and science.
The Sun editorial isn't particularly wrong in that context. Salisbury is a mere 40 miles from the Wallops Island facility, and the Maryland side of the Shore boasts two four-year universities, a transportation hub for railroad, air, and road, as well as Ocean City. However, the Sun's ability to determine how best to attract jobs and workers to the Maryland side of the border is....curious:
Is Maryland doing everything possible to support this venture? Certainly, its elected officials have been helpful, particularly U.S. Sen. Barbara Mikulski, who has long championed NASA generally and Wallops and other local facilities specifically. But Maryland and the Shore counties must also take steps to attract aerospace professionals and their families by investing in the kinds of lifestyle amenities they seek — good roads and transportation, safe and attractive communities with public assets like museums and parks, quality health care and child care and first-class public schools, colleges and universities.
The assumption of the Sun editorial staff is that workers and businesses are going to be most attracted by "amenities" and "public assets." They go on, derisively, to say this:
Rock-bottom tax rates? Lax environmental laws? "Anything goes" development policies? Not usually high on the list for highly-educated white collar professionals or their ilk.
Of course that fact is an inconvenient truth and just a flat out false statement on the heels of the attention that Governor Rick Perry's pursuit of Maryland jobs and businesses. As we have long noted here, Maryland faces some of the highest marginal tax rates, is second in income tax revenue as a percentage of government funding, and is near the bottom in tax friendliness, has ever increasing energy rates, terrible roads despite higher gas taxes, schools that don't perform up to their vaunted #1 ranking. Even worse for the Sun's hypothesis is that in the Wallops Island region Maryland will be in direct competition with Virginia, which as Change Maryland notes took nearly 11,500 residents and $390 million in tax revenue from Maryland from 2007-2010 without competing directly against one another as in this instance.
If you had a choice between low taxes and low regulation, and high taxes and high regulation, where would you move your family or business?
I think we all agree that Maryland should do what we can to woo businesses and workers to the Maryland side of the Eastern Shore. But to think that the current menu of taxes, fees, and regulations are going to our side of the border more attractive to these folks is to be in serious need of the a reality check. Until we enact policies that will ease the regulatory climate, lower taxes on businesses and individuals, and enact actual solutions to fix education that don't involve just throwing money at the problem, we will always be behind the 8-ball when competing against Virginia. And no amount of state spending, university presence, or "amenities" is going to change that until we address the root cause of this tax and regulatory environment...

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