Chairman's Message: Montgomery County to Lemonade Entrepreneurs: You're Fined
Kids Lemonade Stand at U.S. Open Fined $500 By Montgomery County
This is U.S. Open week in Montgomery County and under normal circumstance our opportunity to shine as an attractive place to live and work. Unfortunately one of the news stories generated by the event provides a reminder of Montgomery County's and Maryland's declining business climate. WUSA-TV reports that the parents of a group of pre-teen kids were fined $500 for operating without a permit a lemonade stand near Congressional Country Club.
The station interviewed one of the mothers, Carrie Marriott, who reported that the county persisted in fining the families, even after they learned that the children intended to donate all the money raised for pediatric cancer. The children's charitable intentions are hardly surprising in light of their family's extraordinarily generous philanthropic record.
This story could be written off as another one of those "Montgomery County government overreaching" stories that we generate with disappointing frequency. However it highlights another issue too.
Governments have been erecting more and more barriers to entry for small business.
Last month the magazine the Economist in "Rules for fools: the terrible threat of unlicensed interior designers" noted that:
"In the 1950s, when organization man ruled, fewer than 5% of American workers needed licenses. Today, after three decades of deregulation, the figure is almost 30%. Add to that people who are preparing to obtain a license or whose jobs involve some form of certification and the share is 38%. Other rich countries impose far fewer fetters than the land of the free. In Britain only 13% of workers need licenses (though that has doubled in 12 years)."[1]
The magazine commented favorably on the work of the Institute for Justice, which describes itself as "what a civil liberties law firm should be - challenging the government when it stands in the way of people trying to earn an honest living and when it unconstitutionally takes away individuals' property."
According to the Institute, the burden of occupational regulations falls most heavily on ethnic minorities (who are less likely to have educational qualifications) and on women (who might want to return to work after raising their children). These occupational regulations also make it hard for people to move from state to state.
According to Morris Kleiner of the University of Minnesota, licensing slows job-creation. He compared occupations that are regulated in some states but not in others and found that job growth between 1990 and 2000 was 20% higher where occupations are unregulated.
All of this has consequences in Maryland.
Marta Hummel Mossburg of the Maryland Public Policy Institute in a recent op-ed piece in the Frederick News-Post notes that "Since 2003, more people have been leaving than coming to the Free State. According to Census data, Maryland lost almost 96,000 people to domestic migration from 2000 to 2009."
She quotes a 2008 paper from the O'Malley Administration's own Department of Planning as explaining the situation this way: "The turnaround in net domestic migration from a net inflow in the first three years of this decade to a net outflow in the last five years is mostly due to two factors: decreasing relative economic vitality and rising relative housing costs."
"Decreasing relative economic vitality" is a good description of Maryland.
This is the consequence of Maryland being ranked by the non-partisan Tax Foundation ranked Maryland as the 45th business-friendly state, out of the 50 US states, when just four years ago, but with a different administration, Maryland was ranked the 25th business-friendly state.
Coming back to the Marriott and Augustine children.
Their news story has gotten wide attention international news attention. People around the world are likely concluding the Montgomery County officials are so inflexible and rule-bound that they incapable of exercising the simplest common sense.
Now picture a CEO attending the US Open, and also looking for a new business location. It seems very likely that he or she may be concluding that while Montgomery County is a nice place to visit, if we treat these kids' lemonade stand this way, this is not a very attractive place to do business.
Mark Uncapher
Montgomery County Republican Chairman
[1] http://www.economist.com/node/18678963 Rules for fools: The terrible threat of unlicensed interior designers May 12 2011
MCGOP CONVENTION!