Q&A with Peter Franchot

Peter Franchot isn't on the Christmas card list of most Maryland legislative leaders and that's the way he likes it.

Franchot, Maryland's comptroller, has collected $18 billion in taxes in his first year on the job, but don't expect him to follow party lines.

In fact, the former state delegate for Silver Spring and Takoma Park likes to stand alone. He has led a vocal crusade against slots — a role some argue isn't in his job description — and has become an independent voice on policy issues.

“It doesn't make me popular to the extent that I tell the unvarnished truth about economic issues but that's not what I was elected to do,” he said.

“I often say to people I'm a good Democrat and I'm proud of the Democratic party, but I'm not a robot for the Democratic party. I'm the comptroller; I represent Independents, Republicans, Democrats.”

The comptroller does more than just collect taxes.

Franchot sits on the State Retirement & Pension System board of trustees and is one of three on the Board of Public Works alongside the governor and state treasurer, which meets every two weeks to vote on nearly 50 different contracts averaging $400 million in total state spending.

“We each have one vote and it's a very powerful, little panel,” he said. “I'm not going to vote for something because of a secret handshake or because I know someone or because it's good politics. I'm going to vote for something only if it's good for the people of Maryland.”

And serving Maryland brings a smile to his face.

“I'm lucky enough to have won an upset victory and to be in one of the very few statewide elected offices in Maryland,” said Franchot, who beat incumbent William Donald Schaefer and former Anne Arundel County Executive Janet S. Owens in the 2006 election. “I feel blessed I can walk in this office each day and use my skills and my knowledge about Maryland to benefit all of my constituents.”

Franchot recently sat down with Corridor Inc. to discuss the special session, slots and life sciences.

Did you think the special session was a waste of time?

I was a critic of the special session because I believe that the fiscal solution of the state has to be comprehensive, inclusive and fair. I thought because of the rushed nature of the special session that the final package would not have those elements … The country is teetering on the edge of a recession and we need to reach out to the business community.

Why did you urge legislators not to pass the computer services sales tax?

Increasing taxes should not just be a search for revenues and money. The tax code should reflect the priorities of the state. Our strength in Maryland is a knowledge based economy which is increased by our education institutions and that's the economic future of the state. It's counterproductive to place a sales tax on computer services, which is part of that economy.

What does the computer tax mean for Maryland businesses?

Will it produce $2 million in revenue? I think the jury’s out on that because of the experience in other states and the difficulty in enforcing the sales tax on computer services. But I imagine that large companies in Maryland that use these services that before had utilized Maryland-based companies will go out of state.

Do you think this could have been prevented?

Absolutely. This was an idea that was brought up out of the blue and passed with no input from the business community. Once again it goes back to my criticism of passing complicated tax policy in the politically charged atmosphere of the special session. That’s the wrong arena because tax policy by definition is complicated and requires a lot of homework.

Why are you so against slots?

Slots are an irresponsible method of funding state government for several reasons. It's a sleazy, predatory industry and it breeds social problems, crime, addiction, bankruptcy and corruption and offsets whatever revenues are anticipated.

Isn't money coming into the state a good thing?

Sure. We want revenues to pay for the programs in the state but gambling, first of all, it's an unstable source of revenue and second of all it's a predatory, regressive source of revenue. We're the richest state in the country and we've gotten along for hundreds of years without slots.

Do you plan to donate or raise money for the cause?

We’re going to be heavily outspent. The gambling side will put in tens of millions of dollars. The grassroots opposition, which I’m part of, will have some money but we’ll be outspent 40 to 1. But I’m confident outside of the state circle, the public is going to look at the data on gambling and they’re going to vote no because it’s the wrong direction for the state to go in and it’s particularly wrong to put the number of slot machines and the locations in the state constitution of all things. Does Maryland really want to be known internationally for slot machines in the state constitution or would it rather be known for its No. 1 status in the life sciences? So I think we have a choice between two economic visions. One is supporting legislation and public policy on a dead-end industry, the other would be spending time supporting and encouraging the development of life sciences. We could benefit from a stable, long-term source of revenue in state programs with the life sciences far more easily than slot machines in every nook and cranny of the state.

Why are you so involved with life sciences?

Because I'm the chief fiscal officer of the state and under the constitution I'm obligated to comment on economic fiscal issues affecting the state. I'm simply discharging my Constitution mandate as the comptroller and treasurer. Life sciences pay $570 million in state taxes. If we doubled that in three years it would equal the same tax revenue that slots are supposed to bring.

How should Maryland build its economy?

I believe the future of Maryland's economy lies with life science. Not only will that industry produce good jobs with good benefits for our kids, it's also going to potentially find cures for Parkinson's, Alzheimer's, cancer and other debilitating diseases. We have a great opportunity if we spend 10 percent of the time we've spent debating slot machines helping the life sciences.

Where are we making progress as a state?

By matching up with the federal government's needs. [It] provides Maryland with a very strong platform to grow which protects us against the impact of recession. We need high speed improved MARC service through the Corridor. But we're vulnerable and I'm urging everyone to be cautious in [this] session as far as spending.

Is the Corridor in better shape than the rest of the state?

Yes, because of its proximity to Washington. The Corridor region is the backbone. The federal government is the goalpost. It's still going to get ugly, or could get ugly in Maryland, but we're better off than other states and the Corridor is better off than most Maryland regions.

Do you think you will be governor someday?

I’ve said repeatedly that my career goal is to be comptroller. I trained for 20 years on the appropriations committee, I won in an upset race and I’m personally very satisfied with the job that I have.

What is your view of the Intercounty Connector and what do you think now that it is moving forward?

I support the ICC. As chairman of the transportation subcommittee and appropriations I rewrote the funding proposal for the ICC and used less debt and more operating dollars. We’re going to save over $200 million from taxpayers because of my subcommittee’s funding plan which was adopted. Previous administration was very opposed to those changes but I think it’s proven to be good from a fiscal standpoint. The road is being constructed and it’s a vital link between the 270 life sciences Corridor and BWI Airport.

How do you compare yourself to your predecessor?

I salute William Donald Schaeffer. He was for 50 years the Babe Ruth of Maryland politics and the mayor of Baltimore, governor of Maryland, comptroller of Maryland and I try to emulate some of his legacy that I thought was positive. I am much more of a progressive activist elected official … I’m very policy oriented and I think that puts me in a little different posture than Louis Goldstein or William Donald Schaeffer. I’m putting in my own 20 years in the legislature where I honed my skills to be an effective advocate for all the people. I’m very aggressive on the idea that we can represent everyone and we need to hear from the business community and include them, which is why I was such a critic in the special session. Half the legislators didn’t know themselves what they were voting on, much less the public.