Baltimore Business Journal – by Scott Dance
Gov. Martin O’Malley and former Gov. Robert Ehrlich each say they know how to help small-business owners. But there is another gubernatorial candidate who says he knows better — because he is one.
Brian Murphy is facing off against Ehrlich in the Republican primary. A Chevy Chase resident, he worked for a decade in Baltimore at Constellation Energy Group Inc. And today, he’s behind a small-business investment group whose first startup to date is the Smith Island Baking Co., a maker of Maryland’s official state dessert.
Murphy is looking to separate himself from both Ehrlich and O’Malley with a platform that includes no tax increases, a phase-out of the corporate income tax altogether, and support for Arizona’s controversial anti-immigration legislation.
And his campaign could benefit from several political trends — the wave of anti-incumbent sentiment, the ultra-conservatism of the tea party movement, and the rise of successful businesspeople-turned-candidates like Californians Carly Fiorina and Meg Whitman.
While Ehrlich and O’Malley’s campaigns don’t see the upstart Murphy as a dark horse, his presence in the race could still help stir and refine a developing discussion over how government can help small businesses thrive.
“It’s credibility,” Murphy said of the benefit of his business background. “Even a Republican who’s not a businessperson doesn’t have the same credibility. When I go to a businessperson, I have more credibility than a politician.”
Murphy is indeed new to politics — this is his first campaign. But he has been a lifelong Maryland resident, attended the University of Maryland, College Park and worked for both one of the largest and smallest businesses in the state. He turns 33 on June 29.
Most of his career was spent at Constellation, where he helped develop and oversee the company’s business managing the risk in commodities trading on behalf of utilities across the country. He managed a $4 billion power portfolio across New England and the Southeast — that is, until Constellation had to hastily exit the business in late 2008.
Murphy says while he played an integral part in that business, the risk crisis that crumbled it wasn’t his responsibility — he likened it to being one baseball player whose teammate drops the ball. But regardless, all the players were given the choice to play for another team within Constellation or take a severance package, and Murphy chose the latter.
Rather than find another corporate job, Murphy decided to be his own boss. He founded the Plimhimmon Group, a private investment capital firm, as well as its first portfolio company, the Smith Island Baking Co. The company has two full-time employees, including Murphy, and 18 bakers selling $42, 9-inch-wide, 10-tiered Smith Island Cakes, which were made Maryland’s official state dessert in 2008.
During a busy past winter, the company sold 1,000 cakes, Murphy said. And this winter, he hopes to make that 3,000, which would help land the company its first profit.
He also has plans to build a fund to buy or launch more companies, using $20 million to $30 million that investors have expressed interest in putting up, he said.
But meanwhile, he has also got plans for the state. He decided to make a run for the State House because he felt none of the other candidates were truly looking out for small businesses. He calls his methodology “the Smith Island test” — how would any given policy affect the bakers on the Eastern Shore home of the famous cakes?
Part of his plans in that strategy include cutting back government spending and, by three years into his term, eliminating the state’s 8.25 percent corporate income tax. His competitors, Ehrlich and O’Malley, meanwhile, have both discussed avoiding future taxes, but neither has made it a campaign pledge.
Ehrlich promised to roll back a 1 percentage point increase in the sales tax that O’Malley passed, and O’Malley spokesman Rick Abbruzzese said June 22 that with the state’s falling tax revenue nearing a turning point, new taxes could be avoided under a Democratic administration as well.
Neither Ehrlich nor O’Malley’s campaign is very critical of Murphy so far, as the two frontrunners are in a dead heat with more than 40 percent of the population expected to vote in their favor.
“We admire his passion for public service and believe he has a great future in the party,” Ehrlich spokesman Andy Barth said. And Abbruzzese recognized that his small-business background “will be a very powerful message among Republican primary voters.”
Murphy emphasized the potential advantage over the others because of his experience running a business, and it resonates with some small-business owners. Former Hewlett-Packard CEO Fiorina and ex-eBay CEO Whitman proved that to be the case in California primaries earlier this month, when they won races for California senator and governor, respectively.
“I’m just looking for who will make it easiest for my business to grow,” said Christian Childs, president and creative director of Airplane Corp., a five-person advertising agency in Hampden. “I don’t know if that’s through tax incentives or tax cuts; I don’t know the specific tax policies. But that will be something I consider when I vote.”
Greater Baltimore Committee CEO Donald C. Fry said he thinks the timing is ripe for an emphasis on small business.
“When you go through a challenging time like we had, that certainly comes to the forefront,” Fry said. “I think having some business background and having some managerial experience certainly does help.”
But there are still plenty of voters who won’t look beyond Ehrlich and O’Malley regardless of the credentials of other candidates. Scott Macdonald, CEO of Maryland Thermoform Corp., a manufacturer in Southwest Baltimore, wouldn’t come out directly with his political leanings but suggested he supports Ehrlich, considering him the most business-friendly candidate as a Republican. It could be difficult to differentiate Republican competitors.
“Another guy in the mix, I don’t know if it means anything,” Macdonald said of Murphy. “He’s got to get his name out.”