Something Fishy at DBED The Baltimore Sun reported this past weekend that Department of Business and Economic Development (DBED) made a $500,000 grant – not a loan or investment – to a company that is owned by a social friend of Secretary Aris Melissaratos. The DBED secretary gave the sketchy justification that it was to help a local business grow. It was bad enough the company had no experience in managing a port. The Sun revealed that the company receiving the grant had been eliminated from the bidding process to acquire the port services well before the grant was awarded. This port deal smells fishy and Melissaratos’ explanation just doesn’t hold water. Regardless of the support for his reappointment as secretary by the likes of Senate President Mike Miller and Rep. Dutch Ruppersburger, it is clear that Gov. Elect O’Malley needs to find someone else to run DBED.

The broader question that the new Governor should consider is how government can best help business in the state to grow. By many measures, Maryland’s economy is doing quite well. Jobs growth javascript:void(0)
Publishis solid and unemployment is a relatively low 4%. In a recent survey by DBED, a majority of companies expect employment growth in 2007 while today, 20% of Maryland companies reported labor shortages. And, surprising to critics of Maryland’s business climate, the survey showed that more than 70% of firms think the state is a good place to do business.

These positive developments mask the big challenge that business, especially small and start-up companies, face today – access and cost of health care. In the last legislative session, the “Wal Mart Fair Share Bill” was the legislature’s attempt to address this problem. But in narrowly targeting Wal Mart, they neglected a far bigger problem: the cost of health care for small businesses. A recent NY Times article noted that premiums for small businesses rose at faster pace than for companies with more than 200 employees. The same article pointed out that small businesses spend a median of 18.7% of gross revenues on health insurance compared to 2.3% of the larger companies. Health insurance is one of the biggest costs that small businesses face and one of the biggest impediments to their growth. To get by, many small businesses and start-ups don’t offer health insurance to employees at all.

Instead of granting funds to its business cronies, DBED should focus on helping small business solve their health care problem. Want to attract businesses to Maryland? Find a solution to control or reduce health care costs to small businesses, solve the problem of the uninsured and don’t worry, they will come.

Labels: DBED

  4:20 PM •  1 Comments • Links to this post