the shastasession. you are credited with being one the people who created and implemented it. >> "invest md." is $75 million invested in some of maryland's most innovative companies. we are number one in the united states when it comes to research. equity capitital is a big part of the gap. what we are seeking to do is create the next google, the next microsoft, right in maryland. >> you were called many times to testify. let's use on their armor as one of the great success stories -- let's use under armour as one of the great success stories. >> they had access to venture- capital throughout the life of eir company. you look at young companies they need things at different times. the biggest challenge right now over the next decade is going to be how do you grow more successful companies like that within your borders. >> say i need capital right now, an entrepreneur or wanting to start a business. how do i access those new funds? >> you can go to choosemaryland.org. we are also placing two-thirds of the money with private venture capitalists that will help manage the investments as well. there will be a two-tiered approach that will be a public- private partnership that will set maryland apart from many other states. >> one of the governor's top priorities -- you ran into some roadblocks. how were you able to overcome the skepts? >> we have done this before 15 years ago with $25 million. in return, $61 million to taxpayers. more importantly about $1 billion of private money int these investments that we originally made. we have a track record. we are poised to take off when it comes to the innovation of economy. >> you were teasing me before the show started. the governor likes to tease me about bringing up this issues as well but it is what the business community is worried about. they won one one that is popular with voters, reinstating a tax on millionaires. >> what you find is the governor said at this time he does not believe that a lot of the challenges we were facing, the business community and folks being hit harder, asking folks to take more at this time probably was not the right call. what we looked at instead is where we could save money how could we be efficient, and make sure we retained the triple a bond rating. >> you know the transportation fund is a high priority to the business community. this is a failure to get a lock box to protect the transportation fund? >> if you look at the general assembly and paroles technically, you can not bind a future general assemblies. you also have to have the votes and the momentum to push for something not to move forward. that consensus was not there which was required to move us forward. >> you know i like to stir up trouble betwee. getting their schedules worked out that way is proving to be difficult. governor mcdonald this we put out another press release. he pointed to a n study this is virginia is sixth in the nation for the lowest tax burden on new investment. a lot of businesses say they want to compete with virginia. >> there are lot of factors. one of them is taxes. one important factor is where is your talent coming from? we have the number r one public school system three yearss running. if you look at the other factors that factor in here, the fact is that maryland is the best value for our money. if i had to locate a business in virginia or maryland, it would certainly be north of the border. >> always a pleasure to have you on the show. stay with us. up next, howard schultz tells washington entrepreneurs where he would put his money if he was starting a businestoday. ♪ ♪ ♪ oh, won't you be good to yourself? ♪ ♪ and don't you feel like coming home? ♪ ♪ ♪ ♪ it'll be like coming home ♪ [ male announcer ] some rooms feel like a fish bowl. but in our roomy suites, you can spread out and live a little. with breakfast, dinner and drinks included, you'll feel right at home. ♪ la la-la-la-la la la la ♪ ♪ ♪ >> as promised, part two with starbucks ceo howard schultz. chelsea here is a junior at gw. chelsea had a few good questions and you answered some o them, talking about the values of the business and how it grew and changed. if you were going to start just one small, new coffee shop today, what with the business model look like today? >> i don't think i would open a coffee shop today. [laughter] >> and chelsea, i did not expect that answer. >> i think there are enough of those. if i was opening a retail store today, the category that i would focus on is the enormous opportunity around health and providing a navigational tool for people to live a healthier life. that is where i would go, both increasing retail and other opportunities that a beyond retail because there is a big category that people are hungry for. >> carrie had a few questions. arthur and the new types of retail stores -- are therere any new types of retail stores that you are changing for the future? >> yes. on a macro level we are witness to a seismic change in consumer behavior. it is happening primarily because of two reasons. one is the economic conditions of american to society has changed the way people make discretionary purposes. people have less money. as a result, they are going to be concerned about how they spend it. social media has dramatically changed the way people are accessing and sharing information. there is something going on in asiahat we have begun do is a company in the u.s., and that is the ubiquity of f the smartphones in asia and how the phone is becoming your digital wallet. we saw thatt in korea china, and japan. 82 days ago starbucks creed a mobile payments in the store in 82 days, we have had an unbelievable level of frequency and dollars spent on your cell phone. what is coming in the future and it is not years away, it is now -- your cell phone is going to become your primary payment system. this is a change in consumer behavior. i think this is a very important point. no matter what business you are in, if you embrace the status quo as an operating proposition, -- you must push for self-renewaand you must push for reluctant innovation. the challenge, and greatat companies will do this, achieving the balance. because of technology and because of the change in consumer habits, the status quo of how we have operated our business is very difficult as a sustainable printable. >> -- sustainable principal. >> we heard it throughout the health-care debate. most businesses have said they cannot provide the level of health care that many in congress want. you have bn doing it r years. >> i cannot even remember all of that. >> then we are going to get to the environment. we have to watch the time. >> let's talk about health care first. when we provided this benefit almost 25 years ago it was because of this is the kind of company that we want to build and we do not want to leave our people behind. this was the primary opportunity to do the right thing for our people. now, the last six consecutive years, we have faced close to double-digit increases in health-care costs. we are spending over $200 million year covering our employees' health insurance. something happened during the middle of the crisis. my phone rang and it was an institutional investor in starbucks. he said to me -- it was a very short conversation. for the first time in starbucks history, you have licensed and covered to take health care costs of the income statement. every company that we are investing in is looking at this as a new opportunity. it is a very easy answer for me. the only competitive advantage that we have as a company is the relationonship we have with our people and the relationship that they have with their customers. this is the essssence of the foundation of the company. i am not cutting the benefit. when you make a decision like that it is a non-starter. the health-care benefit is something that is indented, imprinted, and how we do our business, so we are going to find other things to do and other ways to do it. >> if you would like to watch the entire program, we have a link for you. you can find it on our facebook page. search for "washington business report." in other big business news, lawsuits are already flyining over the floodin at washington harbour. a $5 million lawsuit was filed for los wages. up next, three well-known names in the washington business world to talk about the big issues impacting maryland, virginia >> we are going to continue our assessment on the government impact with a round of heavy hitters. barbara lang, president and ceo of the d.c. chamber of commerce peter morici, professor at the university of maryland and jim dinegar, president and ceo of the greater washington board of trade. when the standard and poor's lowered our outlook from stable to negative, i thought peter morici would say that is not tough enough. the market shrugged off by tuesday. >> essentially they give us two years to fix the problem. if congress does not spending a lot less money the bond market is going to take it away. the interest on the debt is going to take money out of the budget that cannot be spent on other things. a lot of this is going to be pushed on it local governments. >> if we do not vote to raise the debt ceiling the market is going to collapse. it did not collapse whe this negative outlook was issued. what about the republicans? >> the market is not going to collapse because we have enough leverage to keep the government funded through july. at the end of the day the republicans will lift the debt ceiling but they wanant something for it. >> you say now is the time. >> it is absolutely time. standard and poor's basically have said they both have a plan and to have nothing to do each other. >> on that analogy barbara let's turn to you. deficits and local municipalities in the state. let's start with you barbara. in te district, the mayor has ruled that they planned to raise taxes. you endorsed mayor gray mayor fenty. a lot of people have credited you with himgetting him elected. what did he say to you? >> some of those conversations will be kept private. >> what did he say? >> i think we could've been more helpful. i think that the mayor had a tough job. he had in over $300 million gap to fill. we know there were tough choices that had to be made. we think we could never create some other way -- >> give us some examples. >> if we are going to do taxes we want to see that it is an investment just like the private sector. my staff is working on a proposal. >> what do you dislike the most? >> there are several things. one is raising the income level taxing it at a higher level of two wanted thousand dollars. the issue there is a small business ceos that you will hit for that. all of the technical assistance for small businesses -- we are raising the franchise tax. the bulk of what is in this budget i think was unintended. you really are hitting small businesses. today are the ones that drive this economy -- they are the ones that drive this economy and are most likely to hire local residents. >> jim, go ahead. what was your reaction to the budget plan? >> big concerns as it relates to reporting. they would be unfairly taxed vis-a-vis the rest of the businesses in the region or in the country. you do not keep digging the hole by raising taxes. instead, you cut the size of the government. we do not want to be enablers onn this. frankly, the taxes are not the way to pay for the increasing size of the government. more economies of scale. we feel there ire ample opportunity to do that. >> the district has extraordinarily high taxes. if you look at the tax burden of people in other large cities state and local taxes it is just too high in the district especially for what it delivers. for example the schools. the good people have given up on fixing their schools. >> i totally think i got my money worth. >> i totally disagree with that. the plan put forth by mayor fenty is continuing. >> i don't think it in talking to the parents i talked to that a that is what the election was about. overall, virginia and maryland both wrapped up their legislative sessions. were you impressed? >> we were not impressed or pleased. there was a lot of nothing that happened in both legislatures which was unfortunate. we pushed hard for a dedicated gas tax. it did not happen. we continue to push for it because the transportation needs in this region to continue. they are getting compounded every day, and we were very disappointed. there was some movement on different issues but no resolution of benefit to the community, business leaders, and the community at large. >> thank you, ala. stay with us. up next our number of the week. ♪ ♪ ♪ are you having any joy? ♪ ♪ ♪ ♪ what you getting out of living? ♪ ♪ what good is what you've got if you're not having any joy? ♪ ♪ ♪ ♪ are you having any laughs? ♪ ♪ are you getting any lovin'? ♪ ♪ if other people do, so canou ♪ ♪ have a little joy ♪ [ female announcer ] how does your next week look? why not get away on a cruise from baltimore? book today at royalcaribbean.com. [ banker ] mike and brenda found a house that they really wanted. it was in my sister's neighborhood. i told you it was perfect for you guys. literally across the street from her sister. [ banker ] but someone else bought it before they could get their offer together. we really missed a great oprtunity -- dodged a bullet there. [ banker ] so we talked to them about the wells fargo priority buyer preapproval. it lets people know that you are a serious buyer because you'v been credit-approved. we got everything in order so that we can move on the next place we found. which was clear on the other side of town. [ male announcer ] wells fargo. with younhen you're ready to move >> a lot of talk about marylan business, and that is how we are going to end it. that is the number of small bunesses in maryland according to the small business administration using 2008 figures. 109,693 of those were employers that account for more than half of the private sector jobs in the state. we hope to see you back next week on "washington business report." ♪ ♪ ♪ oh, won't you be good to yourself? ♪ ♪ and don't you feel like coming home? ♪ ♪ ♪ ♪ it'll be like coming home ♪ [ male announcer ] some rooms feel like a fish bowl. but in our roomy suites, yoyou can spread out and live a little. with breakfast, dinner and drinks included, you'll feel right at home. ♪ la la-la-la-la la la la ♪ ♪ ♪