Maryland Dept. of Business and Economic Development fared well, new secretary says

BYLINE: Dori Berman

His budget suffered some cuts this year, but Department of Business and Economic Development Secretary David Edgerley thinks his department made out well in the first legislative session of the term.

Legislation sponsored by Gov. Martin O'Malley and passed by the General Assembly will create a life sciences advisory board within DBED, and lawmakers also approved a sub-cabinet to oversee issues associated with BRAC - the base realignment and closure process. Despite tight budget times, the stem cell research fund saw an $8 million increase.

"That just is a great example of the increased investment in cutting-edge companies that will give us results for many years to come," Edgerley said of the $23 million stem cell allocation.

The 15-member life sciences advisory board will develop a strategic plan for growing and promoting the industry, and Edgerley said it illustrates the state's commitment to the life sciences.

"I think it sends a message to the industry in Maryland ... that we're very serious about their future," he said.

Edgerley also applauded the new BRAC sub-cabinet, which will help handle the growth associated with the influx of jobs to the state's military installations.

"There are 20,000 jobs coming to Maryland with certainty. What's not certain is the precise timing and how many of the people currently in those jobs will relocate," he said. The uncertainty "creates challenges for all levels of government. That kind of underscores the importance of formalizing that relationship. "

Lawmakers were stingy with tax credit bills, but the department got one of its few wins this year with a bill passed to allow local jurisdictions to exempt publicly sponsored business incubators from property taxes.

But the session wasn't all positive for economic development. O'Malley proposed $2 million for the sunny day investment fund but lawmakers stripped that allocation from the budget.

"That was a disappointment, but we understand it. We know these are tight financial times," Edgerley said, noting other programs allow the department to make venture capital investments, but none have "the horsepower of a sunny day appropriation. "

He was also disappointed by cuts to the film production tax credit, a program created in 2005 to attract the movie industry to Maryland. Lawmakers allocated $4 million for fiscal year 2008, down from $6.8 million for the current fiscal year.

Hannah Byron, the assistant secretary in charge of the film office at DBED, said the reduction will make it more difficult to compete with other states and countries.

"Clearly this is not going to work. It's a very competitive industry, so when they come in to scout for locations and crew, one of the first things they look at is the incentives," Byron said, noting the industry's economic impact in the state was $158 million last year.

While the tight fiscal situation means leaner budgets for executive agencies, Edgerley said he appreciates the opportunity to prioritize. He also applauded the governor's creation of StateSTAT, a program to monitor state spending and look for efficiencies at agencies.

Edgerley said he was surprised to learn shortly after his appointment that the department had been criticized for poor data collection and performance reporting.

"We want to make sure the programs at DBED are accountable in a way that legislative services has referenced we were not in the past," Edgerley said, noting StateSTAT will help in that effort.