As Maryland's economy dives, lobbyists thrive

Nonprofit groups hope their hired guns can fend off budget cuts

Friday, Nov. 28, 2008

A potentially $1 billion deficit and the threat of deep budget reductions has created a catch-22 for lobbyists like Gally heading into the 2009 General Assembly. Some clients, facing their own budgetary constraints, have saved money by ditching lobbying contracts, while others consider it necessary to have a full-time State House advocate in a tight fiscal climate.

"Unfortunately, the economy is hurting nonprofits, just like it's hurting every other industry and you have to look at reducing every part of the budget, including contract lobbyists and grassroots outreach efforts," said Kim Coble, the CBF's Maryland executive director.

Her organization is retaining Gally for 2009, even as decreasing donations have thinned an already lean budget.

One reason is the vulnerability of bay restoration funding. Earlier this year, lawmakers sliced in half to $25 million the amount of money that would be spent on bay cleanup programs. The stormy economic outlook for fiscal 2010 means everything is on the chopping block, prompting some groups to retain or even beef up their lobbying presence.

When Carlos Hardy was hired as executive director of the Maryland affiliate of the National Council on Alcoholism and Drug Dependence in 2007, the organization contracted with lobbyist Ann T. Ciekot only during the legislative session. One of his first decisions at the helm was to make it a year-long contract.

"What I've found is that the amount of work that an organization puts into lobbying when the session is out yields greater benefits once the session does come in," Hardy said. "It was a little bit more expensive, but the return on the investment has been awesome."

The slumping economy makes it more important to have a voice in Annapolis because "you want to make sure that your issues and your constituency is prioritized and you won't have any cuts at all," he added.

Nonprofits can spend no more than 20 percent of their operating budget on government relations, according to state law, but that's a big chunk for some groups who are struggling just to meet payroll.

One developmental disabilities organization made the decision to forego a lobbyist for next year and will rely on the advocacy efforts of the Maryland Association of Community Services, said executive director Laura Howell.

"Nonprofits are in a very difficult position because agencies serving people with developmental disabilities rely very heavily on state funding to provide quality support in the community and yet we're looking at an environment where that funding was cut this year and we certainly fear future cuts," she said. "You want to be able to advocate against those cuts, but you can't afford to pay someone for that advocacy."

A bad economy typically means more business for government relations shops.

"There's no question that people realize that it's more important than ever to defend line items and fight for funding," said Gally, a lobbyist who has owned his firm in Annapolis since 1996. "There's no question that at the very least you're hearing angst from everybody. We certainly have heard from people who have [had a lobbyist] for years and now can't, but we're also hearing from people who haven't that now say ‘We have to do it.'"

"We haven't seen companies withdraw or say because of the economy, one of the places we have to cut back is government relations," said Nicholas G. Manis, a partner with Manis Canning & Associates. "We're seeing just the opposite. They feel it's one part of their business practice that they have to continue. They understand that when times are good, everybody is battling to try to get more funding versus when times are bad everybody is battling not to be the ones who are cut. Those who understand the process realize that it basically balances itself out."

Some lobbyists said they have cut their retainer fees to make it more affordable for clients.

"They can't spend the money they used to spend and everybody's budgets are shrinking," said Susan O'Brien, a registered lobbyist who specializes in media outreach.

The passage of legalized slot machines this month at least provides a light at the end of the tunnel for some clients fearing steep cuts, said veteran Annapolis lobbyist Gerard E. Evans.

"If you are working on issues that affect their bottom line, it actually puts the pressure more on us because we know the things we're doing is affecting people's lives," he said. "It's determining whether people meet their payrolls, so if anything, it puts the heat on us to try to do a better job. As much as popular culture would like to deny it, I think lobbyists are needed maybe more in tough times."

The decision to retain Leonard L. Lucchi was a no-brainer for Vincent DeMarco, president of the Maryland Citizens' Health Initiative, which hopes to defend a health care expansion program passed during last year's special session that has been mentioned as a possible target of cuts.

"For us, it's important whenever health care is an important issue and that's all the time," said DeMarco. "He's critical to our success. We understand that it's tough economic times, but we're a frugal organization and we take care of spending our money wisely and I think part of that is making sure we have a strong voice in Annapolis."

abrody@somdnews.com