A Baltimore business owner says he doesn't need government help to hire people but rather government relief. Barcoding, Inc. owner Jay Steinmetz opined in the Wall Street Journal last week that government regulations, government fees and penalties for the trivial, and failing conditions in Baltimore made it harder for him to thrive in a city that desperately needs jobs. Keep Jackson in mind and compare it to the burbs as you read this column. Mr. Stienmetz wrote:
The supply-chain management company I started in the late 1990s and lead today is in downtown Baltimore. On the night of the worst violence last month, there were more tempting targets than our cement, nondescript building, like the liquor store 150 yards away that was looted. Yet on any given day what takes place in this neighborhood is a slow-motion version of recent events. Graffiti, which anyone with experience in urban policing will affirm is the first sign of trouble, regularly appears on the exterior of our building. From there the range of crimes escalates to burglarizing cars in the parking lot, and breaking and entering our building.
City policies and procedures fail to help employers address these problems—and make them worse. 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. The real cost of these ill-conceived policies is to the community where we—and other local businesses in similar positions—might be able to hire more of those Baltimoreans who have lost hope of escaping poverty and government dependency.
Maryland still lags most states in its appeal to companies, according to well-documented business-climate comparisons put out by think tanks, financial-services firms, site-selection consultants and financial media. 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.
The bottom line is that our modest 14,000-square-foot building is hit with $50,000 in annual property taxes. And when we refinanced our building loan in 2006, Maryland and Baltimore real-estate taxes drove up the cost of this routine financial transaction by $36,000.
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.
Harder to quantify is the difficulty people face who want to live here. Our employees reduce their tax burden and receive better public services in the suburbs. I live in the city, however, and it is a challenge to stay here. My two children attend a public elementary school where classrooms are filled beyond capacity with 30 or more students. Bathroom stall doors and toilet-seat lids are missing. The heat goes out in the winter and the air-conditioning goes out in hot weather. It’s hard to explain the importance of developing science and math skills to students wearing winter coats in the classroom.
Contrary to President Obama’s suggestion in a news conference following saturated television coverage of the riots, lack of urban “investment” is not the problem. 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.
Leadership can change this. Maryland last fall elected a new governor, Republican Larry Hogan, who campaigned on improving the state’s business climate and bipartisanship. Baltimore’s mayor since 2010, Stephanie Rawlings-Blake, says she is committed to rebuilding the city. Despite some minor jabs at each other in the past few months, both showed an effective working relationship during the crisis of the past few weeks. Their political futures will now be linked as the real work begins to repair Maryland’s largest city.
They will be building on perceptions of the Baltimore area that go far beyond the 24-hour, instant-news cycle. We have corporate success stories to tell the world about, including Under Armour, a global leader in sports apparel, and McCormick, the classic American spice company founded here in 1889. But these companies succeed despite the business climate, not because of it.
The simplest, most direct way to offer hope to discouraged people is to hire them. The Baltimore business community has a simple message to law enforcement and elected officials: “Help us help you.” People making good wages, working at jobs they are proud of don’t destroy themselves or the place where they live. We have the political and business talent to rebuild one of America’s great cities, once we focus on creating the conditions for job growth.
Mr. Steinmetz, a former member of the Maryland Small Business Commission, is the CEO of Baltimore-based Barcoding Inc.
Thursday, May 7, 2015
Business owner needs relief, not help, from the government.
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14 comments:
He nails it. He could be describing Jackson. It always goes back to leadership. You have it in the burbs. None in Jackson. And the problem is always the same...no employment leads to the entitlement culture that leads to continued poverty and the cycle never ends. And the saddest part is that many Repubs (I am one) bought into the NAFTA/global economy shtick we were sold in the 90s. We now have all the cheap tennis shoes, TVs, clothes, and junk we can stomach. And all the little companies/manufactures throughout our state closed. And all those jobs? GONE to Mexico, China, India. Were they great technology jobs? NO but they were a JOB and needed to be done. And what do those people do now...welfare. The dumbest piece of legislation we ever passed. We literally impoverished half of the country and we sit around bitching about everyone on welfare. WE VOTED FOR IT. I voted for it because I believed the mantra and voted for the politicians supporting it at the time. I was much younger and not a business owner then. Now I am. Nothing is free.
An important illumination Kingfish. I read this the other day which adds grist to your mill:
According to the Bureau of Labor Statistics, 20.7 percent of the nonfarm jobs in the City of Baltimore in March were government jobs.
Nationally, 15.5 percent of all jobs are government jobs.
.....
Of the 364,200 total jobs in Baltimore City in March, 75,500—or 20.7 percent—were jobs working for the government. That included 39,400 state government jobs, 26,000 local government jobs, and 10,100 federal government jobs.
By contrast, there were only 11,600 manufacturing jobs in Baltimore City, according to BLS. That means government had 6.5 times as many employees in Baltimore City as all of the manufacturers located in the city.
Well said 8:29 pm.
The placement of this story above the one about trying to run a family out of town for running two small businesses is hilarious.
10:30 -- VERY witty -- difference is that your two people (Anna and Neal) were not creating a succession of jobs and bettering the community, but running an illegal, unlicensed poultry business in the city limits, and also aiding a corrupt out of state business (Oxford House), in demolishing residential areas for their own personal financial gain. Grow up --- the discussion of this article is for adults. You OBVIOUSLY are not one, so go watch MTV. I hear Teen Mom is showing al evening.
This reminds me of the msnews now report tonight titled "Is the City of Jackson really open for business?"
If anyone is renovating anything in downtown Jackson, please Jackson, let them do it.
At one time I new the answer but I no longer know how many manufacturing jobs exist in Jackson. I'm thinking it's far fewer, percentage wise, than in Baltimore.
Like Baltimore, Jackson is Mississippi's largest city and should be a example, a positive one. But, in every respect it is a negative example. Madison, by contrast has ONE manufacturing company of which I am aware. Thirty years ago that place was one of the largest employers in the county. Now it's targeted for being run out of town. It no longer comports with the color scheme and columns.
Jackson nor any other city can survive on craft beer sales, one act plays and artsy diners.
Kim Wade, who has for years trumpeted the evils of Jackson's anti-business climate is right and always has been right.
This is the end result of leaders elected by a majority of low income and low education voters that can't fathom hard work or success absent government care and handouts. Our local government does not foster business because the local electorate does not favor business growth.
Well, Annapolis is the capitol of Maryland, not Baltimore.
Baltimore is a pre-Revolutionary city and more than a little of the federal money went to historical preservation.
It's also the 26th largest city in the country. While the racial percentage is similar to Jackson, that is about all that is similar. The average income is much higher and the poverty level much, much lower.
Our State doesn't seem to be feeding money into Jackson the way the article suggests Maryland supports Baltimore.
I don't know of regulations that require businesses to remove graffiti or charges for alarms, but if there are , can you tell me the alarm charge? I know what a good spray washer and paint costs.
Since I have more than a few friends in Baltimore, I can tell you their businesses are doing well. They believe more than a little of the problem has been caused by gentrification.
Gentrification hasn't come to Jackson yet, but it will.
Those of you so certain about the future, should try to read a bit of socio-economic history of both cities and suburbs...particularly what the key elements are. Predictable patterns exists. And, those of you in Madison had best get on the learning curve or else go the way of other failed suburbs. Your suburb will age. The new shopping centers will start to get shabby and out of fashion. The infrastructure will age. And, how that was all originally built, all that is hidden will start to matter.
Mary Hawkins did her homework in the beginning and that is why Madison has done well. But, what she couldn't overcome is the building and development codes that result in bad bones beneath the pretty veneers.
If the average person on full government support gets a 69k package from the government then I would rather them get a BS job doing something from 8-5 everyday however it got worked out.
Being a liberal Democrat in politics means that the policies you vote in will eventually lead to poverty for all and a municipality or region in blight. Being a liberal Democrat and being a minority gives you someone else to blame for the problems you created.
That Baltimore is NOT the capitol of Maryland is totally irrelevant. While 8:47 is rattling on about why Jackson/Baltimore are not comparable, he forgets to tell us the percentage of gubment jobs in Jackson or where the manufacturing jobs are.
It's all about democrat city government for decades and has nothing whatever to do with anything other factor.
Gentrification? Bullshit! Jackson has gone thru periods of gentrification several times over the past hundred years. The 'landed gentry' class today, however, may not be to our liking.
It certainly is relevant that Baltimore is not the capitol of Maryland if you are going to make comparisons.
Mississippi will not and cannot move the capitol and government buildings to relocate.
Nor is moving three major hospitals relocate feasible.
What that means economically is that despite all the negativity, Jackson has economic anchors especially when adding the colleges and a university.
there is more than a little research out there on how cities and towns develop and the problems that arise.
And, here's a news flash for apparently quite a few of you...violent rioting and looting hasn't been confined to one race over the course of history!
4:41 pm I don't think you have a clue that there is a difference between urbanization and gentrification and the natural cycles of established neighborhoods where some houses decline but in time are in time bought and redone ( Belhaven/ Woodland Hills).
Madison also had a rather corrupt Democratic government when I arrived in MS. More than a few Democrats back then call themselves Republicans today. As far as I can tell, looking at Kemper and the meat packing fiasco as but a few examples, nothing much has changed.
You seem to forget that Madison was developing with Democrats still in power in the county. Or do you not remember when Natchez Trace and Sandalwood and Treasure Cove were developed or that large homes were already being built along the Trace when Dale Danks was still mayor of Jackson?
And, frankly, the black politicians are simply doing what their white predecessors did only they either have less experience or there is more scrutiny.
That Mississippians like you don't " get" that having a thriving capitol is important and do everything you can to emphasize and thus exacerbate the problems that do exist rather than offer constructive suggestions for improvement is beyond stupid!
If you had any sense at all you'd be encouraging people with money to come to YOUR State's capitol to spend it! You'd be wanting to change the percentage of poverty in Jackson not make it worse by encouraging people to leave!
And, if you are going to do comparisons, try , for a change to do your homework on Atlanta and Raleigh or Montgomery!
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