Rain Clouds

Rain. Nobody seems to be enjoying the rain today. It doesn't help that its cold too, at least for May.

I was thinking about this as I drove from The Mall back to my office this afternoon during one of the heavier downpours. It occurred to me that rain is a getting a bad rap this spring. Thanks to the General Assembly, Marylanders have a new to tax to associate with this weather event. The very term “rain tax” comes off as an affront to Mother Nature.

I think it’s doomed.

What started with grumbling on the fringes of the left and the right is now becoming a bipartisan backlash. The lefties are pissed because this is a tax that treats everyone equally, rich or poor. The righties hated it because they hate anything that includes the word tax. It was one thing when Repub county exec Laura Nueman came out against it but when a prominent Dem like city councilperson Mary Pat Clarke added her voice to the fray, it got my attention.

Finally, here’s an issue that both parties can come together on. This could be the beginning of the end of the rain tax, at least in its current form. I suffer no illusion that this tax will actually go away. It will quietly get repackaged into some other environmental or public utilities legislation. Something less susceptible to a nickname like rain tax.

On the Fringe of a Boomtown

Bloomberg recently ranked the Top 12 American Boomtowns. The business editors “sorted through U.S. Census data for metropolitan areas to rank those with the greatest population growth, then scored areas on growth in gross domestic product, adjusted for inflation.”

They should have labeled them Boom-metros though, by the way they lumped areas together to achieve a certain population threshold. For instance, the number one Bloomberg boomer is Austin-Round Rock, Texas. A quick calculation using Google Earth puts Round Rock about 16.5 miles from Austin, as the crow flies.

I point this out because Washington DC “which includes neighboring towns in Virginia and Maryland” is Bloomberg boomer number 6. Using the same methodology I used with Boomberg one, I determined that 16.5 miles in a straight line from the center of DC would bring you right about to Fulton on the southern fringe of HoCo. Close enough to feel the booms ripples.

In some ways HoCo, with its 5.2% unemployment rate is even doing better than its next door boom-metro area where it is averaging 5.5%.

Columbia Gets Some Respect

The Baltimore metro area has been given a new label by the White House Office of Management and Budget. It is now known as the Baltimore-Columbia-Towson MD Metropolitan Statistical Area. To2C netizen, Mike Ratcliffe noted that “Columbia (is) finally getting the recognition it deserves given that it is the second largest place in Maryland and a key economic center.”

“Metropolitan Statistical Areas have at least one urbanized area of 50,000 or more population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties.”

Mike also shared a link to an interactive map from the Census Bureau that shows net gains and losses of HoCo population migration. For example, the map shows that HoCo has had a net gain of population from Montgomery and Prince George’s counties but a net loss to Carroll, Anne Arundel and Baltimore counties.

HoCo Economic Snapshot / March 2013

It’s still good to be a farmer in HoCo. According to latest HoCo Economic Indicators report, “sequestration is expected to have little or no effect on local agriculture.”

I was also surprised to learn that 28% of our HoCo farms are run by women. The HoCo EDA is sponsoring a Central MD Women in Agriculture Forum at the fairgrounds this Thursday.

Farmers are one of the few groups in the loco business community that aren't chewing their fingernails these days. Overall HoCo businesses reported being cautious in spending and hiring, generally having “a lack of confidence about the future.”

“Owners are keeping tights rein on spending. Wages are not rising and efficiencies captured from technological gains will limit new hires.”

HoCo still has the lowest unemployment rate in the state at 4.7%. The statewide average is 6.7%.

There are other bright spots too. Reported fees for Planning and Zoning are 126% higher for January 2013 than January 2012. The total fiscal year to date value of non residential construction is $63,288,495, a 257% increase over the same period last year. This level of activity is evidenced by new development projects in downtown Columbia, Turf Valley, Wilde Lake and Maple Lawn.

Retailers reported doing okay too with “moderate increases across the board.”

“Small appliances and hardware have improved but tend to item driven. One such example is the popularity of K-cup coffee products.”

Check.

The Bag Tax is a Good Tax

If the General Assembly passes House Bill 1086, Maryland would become the first state in the country to impose a statewide tax on plastic bags. This is one tax I can get behind. According this editorial in The Washington Post today bag taxes “are effective at cutting litter and popularizing the reuse of bags; and industry arguments against such measures are nonsense.”

“The evidence from the District and Montgomery is overwhelming. In the District, plastic bag use has dropped by at least half since the 5-cent tax went into effect in 2010. In Montgomery, the drop was significant — about a third — though not as sharp as in the District; however, the county collected more than $2 million from the tax last year, which will help it pay to remove litter that includes plastic bags.”

I've been a staunch proponent of reusable bags ever since I listened to Jean-Michael Cousteau at the Baltimore Speaker Series a little over three years ago. Since then I've amassed quite a collection.

Plastic bags are a public nuisance. A neighbor once quipped that we should make them the state flag since you can see them flutter in the wind almost everywhere.

“Industry lobbyists even argue that plastic bags don’t contribute much to litter, as if the visible evidence all around — bags in tree limbs, bags blowing down the street, bags clogging sewer drains — is invented. A study by the Maryland Department of the Environment last year confirmed their harmful effects.”

HoCo Delegates Guy Guzzone and Liz Bobo are signed on as sponsors of the bill making this one of those rare moments when I actually support Liz.

Simpson Bowles 2.0

Tonight at the Baltimore Speaker Series, Erskine Bowles boiled the country’s fiscal crisis down to five issues: healthcare, defense, social security, the tax code and compounding interest. The former chief of staff to Bill Clinton also expressed his disappointment with President Obama for not embracing the recommendations of the National Commission on Fiscal Responsibility and Reform that he co-chaired with former Repub Senator Alan Simpson.

Erksine was entertaining and a bit scary too. As he sees it, if Congress and the president fail to proactively take bold measures to fix the nation’s deficit on their own, a crisis of epic proportions will force them to, sooner rather than later. He said that when they first started working on the commission he believed this was something we needed to do for our grandchildren. He now believes the problem is much more urgent. “We need to do this, not for our grandchildren or even our children. We need to do this for us.”

To point out the absurdity of our current situation, he noted that we are bound by treaty to protect Taiwan from an attack by China but we’d have to borrow money from China in order to do so.

Once again the speaker series did not disappoint.

The good news is that he and Alan have not given up. They have launched a grassroots efforts “The Can Kicks Back,” as well as an online petition “Fix the Debt” to encourage citizens to get involved. Erskine also told the audience that next Tuesday they will announce a joint effort with Pete Domenici and Alice Rivlin and their Debt Reduction Task Force to apply a full court press on Congress. He called it Simpson Bowles 2.0.

HoCo Economic Snapshot / December 2012

Last year was a good year for HoCo farmers, According to the December issue of HoCo Economic Indicators the loco agricultural economy was led by corn which “bought the best prices on record.”

There are concerns going forward.

“This being a healthy year for growth of products, farmers are still seeing very high fuel, fertilizer, and machinery parts costs soar.”

It was also a good year for residential real estate with median sale prices up by 7% compared to a year ago and inventory is 35% lower. “The sale price to list price on average is now 97%. Multiple offers and escalation clauses are helping bring the sale to list price closer together.”

The appraisers, on the other hand, are a bit behind the trend.

“When there are multiple buyers willing to pay over the asking price and appraisers pricing is below the asking price it leads to frustration for all parties involved.”

It wasn't a great year for commercial real estate, according to the report, with new development “virtually non-existent.” The upside is that the lack of new product has helped bring the commercial vacancy rate down to 13.7% from 15.9% a year ago. 

I think they missed the loco leasing activity tied to the Department of Defense. The DoD took down 150,000 square feet of new space in Emerson Corporate Commons in North Laurel and another 140,000 square feet of new construction in the River Corporate Park in Columbia. I wouldn't actually call almost 300,000 square feet "virtually non-existent" though you could make the argument that these buildings were developed outside of the normal market. Neither of these office projects were openly listed for lease even though they were both speculative developments.

As of September, the HoCo unemployment rate stood at 4.9%, down slight from 5.4% for September of 2011. The HoCo population, as of July 2012, stood at 294,477.

You can find the complete December 2012 report here.

Not Quite As Advertised

Supporters of the move to expand gambling in Maryland (Question 7) have been claiming that it will bring in $200 million in additional state revenue.

That may be off by half.

According to this story by Gary Haber in the Baltimore Business Journal, almost half of the “revenue promised from adding a casino in Prince George’s County and table games at Maryland casinos is existing gaming revenue…”

And that whole thing about how this gambling expansion will help our schools?

“Cutting casino tax rates for casino operators to compensate them for lost business from a Prince George’s County casino will reduce the amount of money a casino expansion would contribute for education funding, the report said.”

The study, conducted by the Maryland Policy Institute, also found that, of the revenue from a new casino in Prince Georges County, only “22 to 24 percent will come from out-of-market visitors.”

You can find the complete study here.

Nice Bus but Cash Bar

When I read that a statewide economic development bus tour was going to make its last stop at Merriweather Post Pavilion today it piqued my curiosity. This was the first I’d heard of it. Unbeknownst to me until today, a bus equipped with a recording studio, has been traveling around the state for the past three weeks inviting entrepreneurs and would be entrepreneurs to hop on the bus and record a pitch for their idea. The objective is then to take these budding businesses and try and connect them with resources.

According to this story in The Washington Post, “participants meet and receive feedback from top business leaders and have the opportunity to record a four- to six-minute business pitch inside the bus studio.”

“A panel of business professionals will judge the entries and choose several to advance to the next round. The winners will fine-tune their pitches for showcase at the Entrepreneur Expo, an event on Nov. 13 sponsored by the Maryland Technology Development Corp., or TEDCO.”

One of the major sponsors of the tour was our own Economic Development Authority, so naturally the county exec was on hand this afternoon to celebrate it’s conclusion in front of a group of approximately 100 people. The reception was held in the orchestra pit in front of the main stage and included a cash bar. Laura Nueman, the CEO of the HCEDA, introduced Ken as “our next governor.”

“Next year I’d like to see a thousand people here,” he told the assembled business people. I couldn't but think that free drinks might help that, particularly free drinks from Maryland brewers and vintners.

It seems like that would be a nice way to showcase some of Maryland's successful entrepreneurs too.

HoCo By the Numbers…Fall 2012

The unemployment rate in HoCo currently stands at 5.5%, down slightly from the same period last year and still significantly below the national rate (8.1%). During the same period of time the total number of jobs in the county rose 4.3% to 159,503.

These numbers were reported in the September 2012 issue of Howard County Maryland Economic Indicators, a joint publication of the Howard County government and the Howard County Chamber of Commerce. The report tracks data through June.

HoCo also experienced a slight drop in office space vacancy from 13.9% to 13.8% which occurred in spite of an additional half million square feet being added to the market. HoCo now has over 11.5 million square feet of office space.

Other loco economic highlights include a 7.5% increase in personal income tax receipts and a 93.7% increase in Planning and Zoning fees, though building permits declined 16.9% from the same period last year.

It’s been a good year so far for HoCo agriculture too with soybean and corn expected to produce record crops. “Beef milk and bread prices are expected to increase in the long term due to increases in feed prices resulting from the Midwestern drought.”

This release of this report comes at the same time we learn that HoCo remains one of the top ten richest counties in the country. Seven of the nations richest counties are in the DC metro area, with HoCo in the number 5 spot, down two places from last year.  According to this story by Carol Morello in The Washington Post, “Maryland has the nation’s highest household income level, and Virginia is ninth.”

“The rankings in the 2011 American Community Survey released Thursday expand Washington’s dominance among high-income households, reflecting a regional economy that was largely cushioned as the recession yanked down income levels elsewhere. Household incomes rose in most counties around Washington last year, even as they continued to sink around the country.”

Flawed Comparison

HoCo has always had a split personality when it comes to the big cities to the north and south of us. Some cheer the Ravens and the Orioles while others root for the Nats and the Redskins. When traveling outside of the area and asked where they’re from, some locos will say Baltimore while others will say DC.

As far as the Bureau of Labor Statistics is concerned however, HoCo is part of Baltimore. That means job growth at Fort Meade gets attributed to the Baltimore Metropolitan area as opposed to the Maryland suburbs of DC.

Yesterday, in his column in The Washington Post, Robert McCartney pointed out that job growth in “suburban Maryland is lagging far behind” that of Northern Virginia and Washington, DC.

“The contrast in jobs performance is dramatic. Here are the figures on how many full-time jobs each jurisdiction added in the 12 months ended in July, according to the Bureau of Labor Statistics:

Northern Virginia: 32,200 jobs (a 2.4 percent increase);

District of Columbia: 10,000 (up 1.4 percent);

Suburban Maryland: 1,400 (up less than one-fifth of 1 percent).”

In the very next paragraph he points that employment increases in HoCo and AA counties aren't included into the suburban Maryland numbers.

“Those counties are gaining jobs as military intelligence facilities expand in and around Fort Meade, just 28 miles from the White House — but they’re counted as part of greater Baltimore. Northern Virginia includes counties such as Spotsylvania, more than 50 miles away.”

Now before you start railing about Maryland being overly dependent on federal spending remember that Northern Virginia and DC are just as dependent on those federal dollars we are, especially DC.

On the other hand, we could still stand to be a bit more business-friendly in the Free State, even if we are solid blue.

“The fact is, Northern Virginia’s advantage has been growing for years, and has been fostered by both Republicans and business-friendly Democrats.”

We just need more of those “business-friendly” Dems in Annapolis.

Census App

The Census Bureau now has its own app. It’s called America’s Economy and its bound to become a must have for politico wonks and econ wonks alike

I downloaded it this morning

According to this story by Carol Morello in The Washington Post, the app “provides updated statistics from the Census Bureau, the Bureau of Economic Analysis and the Bureau of Labor Statistics. It includes 16 monthly economic indicators, such as house sales, personal income, international trade, Gross Domestic Product and the unemployment rate.”

“The app is the latest step the census has taken to use the Internet more in both collecting and disseminating statistics. Last month, the White House cited the Census Bureau as an example of a federal agency that is “making great strides towards putting a solid foundation for a 21st Century digital government in place.”

America’s Economy is free and available for iPhones, iPads, and Android devices.

Three HoCo Companies Make Inc. 500

Every year Inc. magazine ranks the 500 fastest growing busisines in the United States based on revenue growth. This year, Astrum Solar, based in Annapois Junction, was ranked No. 2.

According to this story by Ryan Sharrow in The Baltimore Business Journal, Astrum recorded “23,577 percent growth in the last three years and revenue of $26.9 million in 2011.”

They weren’t the only HoCo companies to make the list. Columbia based PCI Strategic Management was ranked 112 and Elkridge based Linq Services was No. 300.

The complete list for 2012 will be published in the September issue on Inc.

Creative Classing

The recent news that The Atlantic Cities online magazine had recognized HoCo as one of top ten counties in the country for concentration of the creative classes whetted my curiosity to learn more about what that actually means. The term “ creative classes” has been popularized by Richard Florida’s book “The Rise of the Creative Classes” eight years ago. 

“The economic need for creativity has registered itself in the rise of a new class, which I call the Creative Class. Some 38 million Americans, 30 percent of all employed people, belong to this new class. I define the core of the Creative Class to include people in science and engineering, architecture and design, education, arts, music and entertainment, whose economic function is to create new ideas, new technology and/or new creative content. Around the core, the Creative Class also includes a broader group of creative professionals in business and finance, law, health care and related fields.”

That’s a pretty big class.

Richard Florida is a senior editor of The Atlantic, the parent publication of The Atlantic Cities, so it comes as no shock that it focuses so much energy on identifying creative class areas of the country. In addition to ranking the counties, they ranked creative class states of which Maryland is number 3, behind the District of Columbia and Massachusetts. I suppose it’s nice that we beat Virginia at something. Squeezing even more juice out this topic, the magazine also ranked creative class metro areas. In this list Maryland got lumped together with DC, Virginia and West Virginia for a third place ranking.

West Virginia?

Maryland vs Kansas

The governors of Maryland and Kansas were singled out in the national press today for being polar opposites in their respective approaches to taxing and spending. In this article by Michael Cooper in The New York Times the reporter writes that “the proper balance between taxing and spending has been raging in Congress, on the presidential campaign trail and in statehouses around the country, and no two states have settled it more differently this year than Maryland and Kansas, whose fiscal years began July 1.”

The Kansas guv “was persuaded that his state needed to cut its income taxes and taxes on small businesses significantly when he studied data from the Internal Revenue Service that showed that Kansas was losing residents to states with lower taxes.”

Many have made the same argument about our neighboring states but our guv takes a very different tack. He was quoted from an address he gave last month at the Maryland Municipal League annual convention.

“How much less research and development would be good for the innovation economy that we have an obligation and a responsibility, a duty and an imperative, to embrace? How many fewer hungry Maryland kids can we afford to feed? Progress is a choice: we can decide whether to make the tough choices necessary to invest in our shared future and move forward together. Or we can be the first generation of Marylanders to give our children a lesser quality of life with fewer opportunities.”

Coincidentally, I also came across this story by G. Scott Thomas in The Business Journals which ranked how well the individual states have recovered in employment since the recession began in 2007. He writes that nine states and DC, “have recovered all of the jobs they lost during the recession.”

The number one state was Texas, led by a Repub guv and the number two state was New York, led by a Dem. Below the top ten were 41 other states that have yet to recover their recession employment losses. Kansas was 21 and Maryland was 23. At that far down in the rankings you’d have to call it a draw.

That being said, I smiled when I noticed the dateline on The New York Times story. It was Ocean City, Md. Kansas may rank two places higher than us in State Nonfarm Employment but it doesn’t have a beach town to file a story from.

That’s gotta count for something.

Live! But Not Real Lively

Last Friday night we headed over to Arundel Mills to check out the new Maryland Live! casino. We were curious to see what the states newest and largest slots parlor looked like inside.

It was dark, though that is fairly typical for a gaming establishment. Casino operators like to separate their guests from the world outside so windows are as rare as clocks. It hardly matters. The views from this casino in a parking garage wouldn't be that great anyway.

If you’ve ever been to Las Vegas or Atlantic City, the sounds you hear upon entering the casino are very familiar, a cacophony of bells and chimes from the sea of slot machines and other electronic table games.

What really struck me though were the patrons. There were a large percentage of older, overweight people plopped down in front of slot machines. The atmosphere may have sounded lively but most of the people we saw were anything but. The absence of dealers and pit bosses further contributes to the indolent atmosphere. This is a place where the machines are much livelier than the humans.

In an article by John Wagner in The Washington Post, Milton Peterson, the developer of National Harbor in Prince Georges County, referred to Maryland Live! as a “slots barn.”

I think that’s a little unfair. What Maryland Live! lacks in exterior design, it makes up for inside. It’s not the nicest casino I’ve ever been in but it’s hardly a barn.

Peterson’s derisive comment about “slots barns” should be taken in context. If the guv is successful in expanding gambling in the state, National Harbor “would partner with MGM to build an $800 million facility with a hotel, nightclub, spa and other upscale amenities.”

That’s about $300 million more than the Cordish Company claims they spent on Maryland Live!

We considered having dinner at one of the two restaurants in the casino, Bobby Flays and the Cheesecake Factory. Bobby Flays is open to the casino and all the attendant slot noise so we ruled that out. The Cheesecake Factory was packed with a long wait just like every other Cheesecake Factory I’ve ever visited.

We ended up going to the DuClaw Brewing Company with their great selection of beers instead. It may not have been that much more lively but at least we didn’t have to wait an hour or talk over a chorus of slot machines in the background.

...and the EuForia ale was so good, I had another.

Down in the Hole

Our recent weather event has once again raised cries for burying all power lines. Even here at To2C, readers have chimed in on the issue.

It has also again highlighted the longstanding Columbia/Ellicott City divide. In some recent casual conversations I've detected a hint of  an infrastructure superiority complex among some Columbians. Columbia, of course, was a pioneer in the burying of power lines forty five years ago. As a result, Columbia in general, suffered fewer power outages than the rest of HoCo, percentage wise anyway.

That being said, there were still power outages in Columbia. The infrastructure is only as strong as its weakest point which occurs in and all around Columbia. This is also true in Ellicott City. In the newer developments, including my own neighborhood, all of the power lines are buried. The problem is that they are connected to the old parts where the wires are hung on poles, the aforementioned weak link. In Ellicott City the old parts occupy a larger geographical area than the new parts.

 Whether or not to just go ahead and bury everything everywhere has been battered around for some time now. According to this story by Mike DeBonis in The Washington Post, “In 2005, the Maryland Public Service Commission studied whether creating a statewide system of underground lines would be wise. The group concluded that building such a system would be too expensive, …”

There also seems to be a question as to whether it is even worth it.

“A 2009 report from the Edison Electric Institute, a trade association for public utilities, said data show that underground systems have “only a slightly better reliability performance” than above-ground systems.”

Then again, if you just measured the performance of underground power lines in times of storms like last Fridays, putting the power in the hole wins hands down.

“Pepco said in a 2008 report that outages involving overhead wires took 2.8 hours to repair, while the average outage involving underground equipment took 4.4 hours. But during and after storm events, the calculation changed: Above-ground equipment took an average of 8.2 hours to repair, “while there were no [underground] storm related failures for comparison.”

And then there’s that…

Three Days, No Donuts

As HoCo headed to normalcy this morning, signs of the disruptions caused by Friday nights “super derecho” storm were still evident.

The Dunkin Donuts on Montgomery Road in Ellicott City was open for coffee but had no donuts for dunkin’. The store lost power on Friday and didn’t get it back until late yesterday making it one of the storms losers.

The winners were mostly next door in Columbia. Overall Columbia appears to have fared much better than Ellicott City. Yesterday I took Mama Wordbones to visit Wegmans for the first time and it seemed as if half of HoCo was in the store. One of the employees by the sushi bar told me that the store never lost power and that they'd been "crushed" all weekend.

It was a different story on Main Street in Ellicott City. Instead of the usual summer weekend crowds the historic district was largely empty as shops closed due to lack of power. When I drove through the old mill town on Saturday morning, restaurants were scrambling to preserve their perishables. I spotted this crew moving food from Tersiguel's to a refrigerated truck while a generator droned in front of Scoop Ahh Dee Doo.

As Ian Shapira wrote in this story in The Washington Post, “Natural disasters have a natural way of doing this. They mysteriously transform some people into the haves and the people next door into have-nots.”

In this particular storm, it appears that Columbia was the haves, and EC was the have-nots.

Wanted: Cyber Warriors

For recent college grads that have had difficulty getting their footing in the job market, you may want to head back to school to study cybersecurity. According to this article by Alexander Fitzpatrick in The Washington Post yesterday “not enough digital experts are entering the cybersecurity field to meet the ever-growing demand.”

“The government needs to hire at least 10,000 experts in the near future and the private sector needs four times that number, according to Tom Kellermann, vice president at Trend Micro and former member of President Obama’s cybersecurity commission. Booz Allen Hamilton, a private security firm in McLean, has hired nearly 3,000 cybersecurity experts in the past two years, and that trend is expected to continue.”

In The Washington Post today, Ellen Nakishima reports that DARPA, the folks that brought you the Internet, has launched a five year $110 million effort dubbed Project X  “to develop technologies to improve its cyberwarfare capabilities, launch effective attacks and withstand the likely retaliation.”

DARPA is tapping into the “private sector, universities and even computer-game companies“ to assist in the effort.

It just might be time to reconsider that degree in Art History.

Gesundheit!

At a commercial real estate seminar last week, Anirban Basu said that from 2003 to 2010, the biotech industry accounted for one third of all jobs created in Maryland. That’s the good news. The bad news is that Maryland lags behind San Diego, Boston, the Research Triangle in North Carolina and Seattle-Bellevue-Everett in creating a sustainable, successful biotech cluster.

It turns out that the regions greatest biotech research institutions like the National Institutes of Health in Bethesda and the Food and Drug Administration in White Oak may be part of the problem. Anirban said it is a mindset problem that keeps the local biotech industry from capitalizing on opportunities.

“When someone sneezes in Palo Alto or Cambridge, researchers try to figure out how to make a buck from it. When someone sneezes in the Baltimore / Washington corridor researchers submit a grant to study it.”

Dr. Judy Britz is trying to change this. She is formerly the President and CEO of Cylex in Columbia and now serves as the Executive Director of the Maryland Biotechnology Center. She hopes to alter this grant writing mindset by embedding private sector  professionals in research departments who can recognize commercial opportunities and capitalize on them.

Gesundheit!