Recently, a business owner in the heart of Baltimore penned a piece describing some of the excessive and burdensome government policies business owner face. His piece gave an eye-opening view of the reality that is decades of fiscal and governmental mismanagement in the city.
For instance, he notes there a fee or fine for a ridiculous amount of infractions: “When the building alarm goes off, the police charge us a fee. If the graffiti isn’t removed in a certain amount of time, we are fined. This penalize-first approach is of a piece with Baltimore’s legendary tax and regulatory burden.”
As for taxes, “Baltimore fares even worse than other Maryland jurisdictions, having the highest individual income and property taxes at 3.2% and $2.25 for every $100 of assessed property value, respectively. New businesses organized as partnerships or limited-liability corporations are subject, unusually, to the local individual income tax, reducing startup activity.” This policy is especially anti-business; a company’s early make-or-break years are impeded by an excessive tax burden.
And regulations? “State and city regulations overlap in a number of areas, most notably employment and hiring practices, where litigious employees can game the system and easily find an attorney to represent them in court. Building-permit requirements, sales-tax collection procedures for our multistate clients, workers’ compensation and unemployment trust-fund hearings add to the expensive distractions that impede hiring.” People go into business to make things, to provide a product, a service, not to comply with government red tape.
So what is the solution? Typically more money is the stock answer from the Democrats but in the case of Baltimore, even that’s not true. They’ve already tried that. “The Maryland state and Baltimore city governments are leveraging funds to float a $1 billion bond issue to rebuild crumbling public schools. This is on top of the $1.2 billion in annual state aid Baltimore received in 2015, more than any other jurisdiction and eclipsing more populous suburban counties. The financial problem Baltimore does face is a declining tax base, the most pronounced in the state. According to the Internal Revenue Service, $125 million in taxable annual income in Baltimore vanished between 2009 and 2010.”
A declining tax base can be reversed once the climate for business growth and opportunity changes. Instead of approaching businesses merely as a source of revenue for a fiscally mismanaged city, give them breathing room. Loosen the regulations. Repeal fees and fines. Lower the tax burden. Give them the tools necessary to grow their companies and create more jobs.
Baltimore has suffocated under the failed progressive policies of the last few decades — the city and the state and local government all run by Democrats. What they’ve done is bad, but what they haven’t done for businesses is even worse.