Anne Arundel Economy Is Gradually Improving
Business, Tax And Budget Officials Talk About The Road Ahead
When Governor Larry Hogan gave his State of the State address at the Maryland State House on February 1, he painted a rosy picture of Maryland’s economy. He declared that Maryland has risen to the top 10 states in overall economic performance thanks to the addition of 73,000 jobs since he took office and an unemployment rate dropping to 4.2 percent as of December 2016, up half a percent from the national average.
According to the U.S. Bureau of Labor Statistics, that 4.2 percent figure has improved from 4.7 percent in December 2015 and 5.5 percent in December 2014.
Hogan also boasted about Maryland’s eighth-place national ranking for manufacturing growth, second-lowest percentage of people living below the poverty line and highest median household income rate in the country. Also, Maryland is one of only 11 states to retain its AAA bond rating.
“We are experiencing tremendous job growth, business growth and an exciting economic resurgence in Maryland,” Hogan said during his speech. “Businesses are returning to and expanding in our state once again. Maryland truly is open for business.”
While the economy has shown improvement, those statistics don’t represent the jurisdictions absent from the “exciting economic resurgence” that are still reeling from the recession.
“Is the economy still fragile? Yes, it definitely still is,” said Maryland Comptroller Peter Franchot, whose primary responsibility is collecting taxes. “Just travel around the shore or Western Maryland and you’ll see it stark right in front of you. Anne Arundel, Prince George’s, Montgomery, Baltimore, Howard counties – it’s a little different climate, but the facts are that we have a very sluggish economy with very pent-up animal spirit if it feels it has the certainty the rug is not going to be pulled out from underneath its feet.”
In Anne Arundel County, many business owners don’t feel as weary about the economic forecast, and for good reason. According to the Maryland Department of Labor, Licensing and Regulation, Anne Arundel’s unemployment rate went from 4.5 percent in 2015 to 3.2 percent by December 2016, the last month on record. That mark eclipsed the statewide 4.2 percent number, tying Frederick County and outpacing all of Maryland’s other 22 jurisdictions except Carroll, Howard and Montgomery counties.
“I don’t think we are facing a sluggish economy at all,” said Julie Mussog, president and CEO of the Anne Arundel Economic Development Corporation, which recruits new businesses to the area and assists in the expansion of existing businesses. “We have an unemployment rate around 3 percent right now, so our main challenge is workforce and getting people in those positions, especially the highly technical jobs.”
According to Mussog, there are almost 300,000 jobs in Anne Arundel County and 286,000 county residents who want to work. Mussog pointed to the approximately 7,500 jobs brought to Linthicum by defense contractor Northrop Grumman.
Using the analogy of being born on third base but thinking you hit a triple, Mussog said Anne Arundel is fortunate with assets like BWI, Fort Meade and Annapolis because of its tourism appeal, medical facilities like Anne Arundel Medical Center and University of Maryland Baltimore Washington Medical Center, Maryland Live! Casino and Arundel Mills Mall. And although most of those places are located in West County – often referred to as Anne Arundel’s economic engine – Mussog doesn’t see the need for the rest of the county to keep pace.
“South County is rural, so they don’t want it and we don’t want it; you’re not going to see a Northrop Grumman in Lothian,” she said. “East County, near Pasadena and Severna Park, they are sort of maxed out as far as space. There is still residential growth, but we’re not looking to put a manufacturing plant in Severna Park.”
Mussog mentioned Port Covington near North County and the Under Armour factory in Curtis Bay as areas near the Baltimore City line that are helping to supplement the growth in West County.
That growth has a direct correlation to the amount of funds the county can spend. Budget Officer John Hammond works with the county executive and county council to provide fiscal, policy and management advisory services to ensure public services are delivered at the least possible cost – a job directly impacted by the state of the economy, which he said is recovering.
“The revenues most closely associated with that are tax collections,” Hammond said, “and they have been improving since the bottom of the recession.”
Although Hammond said “the value of homes on the secondary market is flat,” he conveyed cautious optimism and remained unconcerned that Anne Arundel County traditionally receives less in state funding than other jurisdictions.
“A lot of the state aid given out is related to what are called wealth formulas,” Hammond said. “Anne Arundel is a relatively wealthy county, so it doesn’t bring in as much in state dollars as some other areas.”
At the state level, lawmakers continue to squabble about spending since revenue estimates for Fiscal Year 2017 were off target. Franchot said he anticipates an upcoming period of “robust economic development and wage growth,” but that estimates were thrown off after wealthy individuals were less active in the stock market.
“That transition from optimism to actually borrowing money, investing money and risking money has — the optimism is still there, but there’s no connection right now to ‘Oh, we’re actually going to make the investment,’” Franchot said. “And the explanation for that is the unevenness of the Trump administration. That has got the private sector rattled as far as are we going to have a predictable, rational environment in which to invest. They hate this idea of volatility. It almost has nothing to do with Trump’s issue; it has to do with the sense of chaos where every day there’s something new that’s upsetting people.”
Amid concerns that President Trump’s federal hiring freeze could stagger the Maryland economy, Mussog said she doesn’t see it as a problem in Anne Arundel County.
“When we’re talking to businesses, they’re not that concerned, because most of their jobs are defense-related and that’s not where the freezes are,” she said.
All she sees is possibility for growth. As the Anne Arundel Economic Development Corporation partners with Anne Arundel Community College for workforce development, training future employees to meet today’s standards, she believes that Anne Arundel County will continue to surge forward.
“We’re going to continue with business advisory services and loan programs,” Mussog said of the corporation’s plans for 2017. “It’s about promoting Anne Arundel as a place to start your business and grow your business.”