Maryland subsidy programs score B- in national study

Maryland is fourth in the nation when it comes to enforcement mechanisms for economic development projects that fail to meet their performance objectives, according to a report out today from Good Jobs First (GJF).  However, there is still work to be done as Maryland only achieved a B- grade.  This new report comes a month after GJF ranked Maryland fifth in terms of subsidy performance and job quality standards.

Subsidy enforcement mechanisms are a timely topic in Maryland, as several programs have been in the news recently.  Officials with the Department of Business and Economic Development (DBED) testified yesterday in front of the Senate Budget and Taxation Committee about two programs, InvestMaryland, and the Job Creation Tax Credit, which are intended to spur innovation and job growth.  On Monday, Lieutenant Governor Brown highlighted a proposal that will be in Governor O’Malley’s budget released later today; Health Enterprise Zones (HEZ’s).  Similar to Maryland Enterprise Zones, HEZ’s would provide financial incentives to doctors and clinics that set up shop in areas with poor health outcomes (usually poor rural or urban areas).  The House Ways and Means Committee may also revisit the Tax Credit Evaluation Act, which would require tax credits to undergo a cost-benefit review every five years.  The bill died in the Senate last year.

Narrowing the health outcome gap is a laudable goal, as are job creation and spurring innovation.  However, as the GJF reports highlight, accountability standards and enforcement mechanisms are key to the success of any subsidy program.  DBED is rolling out a database that is a step in the right direction, and passing the Tax Credit Evaluation Act would be another.  Maryland should continue to improve its subsidy programs, to the benefit of all Marylanders