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Franchot Touts Small Business in Crofton

The state comptroller spoke to business leaders in Crofton and touched on issues ranging from the structural deficit to inheritance taxes.

State Comptoller Peter Franchot speaks to members of the Greater Crofton Chamber of Commerce. (Credit: Tim Lemke)
State Comptoller Peter Franchot speaks to members of the Greater Crofton Chamber of Commerce. (Credit: Tim Lemke)
Maryland Comptroller Peter Franchot said the state should focus "110 percent" of its energy on making things easier for small businesses, and reiterated his call for the government to operate more efficiently. 

Speaking before a group of business leaders in Crofton Tuesday, the state chief financial officer said the state has become to reliant on the federal government for its fiscal strength. 

Franchot said the state appeared to make it through the sequester and government shutdown without too much damage, but the ongoing battles over federal spending underscore a need to emphasize private sector growth. 

"The proximity to the federal government is a big asset for us, but we have become lazy in allowing ourselves to be so dependent on it," Franchot said. "That's why I'm constantly urging the state to expand its private sector."

The comptroller also said state lawmakers need to find ways to reduce government spending, after news that the state could once again have a structural deficit within the next two years. Despite an expected surplus following passage of the budget for fiscal year 2014, budget analysts said the fiscal gap could be $400 million buy 2015. 

Franchot said the gap is partially due to lower revenue expectations as a result of an economy that isn't growing fast enough, though some losses have been offset by capital gains from wealthy people.

"That's a window into the middle class in Maryland and it indicates they are facing a lot of stress as far as employment and wage growth," Franchot said. 

Franchot reiterated his belief that government agencies could make self-imposed spending cuts of about 2 percent, and said there should be a three-year moratorium on any new taxes or fee increases. High taxes, he said, are leading wealthier residents to domicile elsewhere.

He also said the state should raise the threshold for when inheritance taxes kick in to match the federal limit of $5 million. 

"There's a reason we've been able to maintain our AAA bond rating," he said. "Whenever I talk to anyone from Wall Street—and I'm on the phone with them all the time—they tell me that we are number one in our willingness to tax our own people." 

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