Wednesday, August 24, 2011

Maryland Beats Virginia in Job Growth - Part 1

Yesterday, the Gazette quietly reported on what some would consider a Bizarro-world scenario: Maryland is now beating Virginia in job growth.

Just a month ago, Maryland’s job creation numbers looked bleak, showing the state with the second-highest percentage job loss in the nation in the previous 12 months.... 
Maryland now is back to seeing job growth in the past 12 months, ranking closer to the middle of the national pack with a 0.1 percent gain. Since January, the state has added a net 13,900 jobs.
Furthermore, all of last month’s net growth was in Maryland’s private sector, as government slashed jobs.
Meanwhile, key regional competitors Virginia and North Carolina lost jobs for the third consecutive month in July and have added only a net 100 and 6,200 positions, respectively, since January.

Observation #1 - Maryland Rules, Virginia Can Shove It (Except Next Year When We Need You!):
Maryland's surging job growth during Virginia's shrinkage, is an especially ironic occurrence in our regional measuring contest. This is owing mainly to the fact that the imagery of our jobs going over to the Confederacy has frequently been used to try and push Maryland and its counties toward lower taxes, anti-labor policies, anti-environmental policies, more corporate welfare.... you name it. The Washington Examiner, in particular, has taken to frequent rantings about the plight and the flight of millionaires in Maryland:
The number of high-income taxpayers in Maryland has dropped by one-third, raising concerns that the wealthy are fleeing the state for its tax-friendlier neighbors.
Headline after headline kept telling us Marylanders (who are accustomed to proudly hating on Virginia) how wonderful things now were in Virginia --"Just go over the bridge and see for yourself! The ethnic food is just delightful!" users even created an "Official Maryland v. Virginia" forum thread, where one partisan wrote, in part (note: I don't vouch for this data):
Unemployment rate
MD: 7.4
VA: 7.1

Percentage of households earning $200,000+
Montgomery County: 15.4%
Howard County: 14.8%
Fairfax County:  17.7%
Arlington County: 15.5%

Major companies that have relocated to VA in the past few years: Hilton, SAIC, VeriSign, VW of America, Northrop Grumman, others
Major companies that have relocated to MD in the past few years: none, some have actually relocated away from MD

NOVA has more billionaires and Fortune 500 companies than DC and MD combined.
Suddenly it seemed like we were outnumbered. Virginia suddenly became our China -- a creature that simultaneously evoked both fear and envy. Montgomery County Councilmember George Leventhal wanted to study this creature; to learn from it. Last year, he commissioned a study comparing various aspects of Montgomery County with Fairfax County. The findings were discussed in a Washington Post article titled "Even Montgomery agrees: Life looks brighter in Fairfax":
"Why does anybody care? Mainly because of the competition to attract jobs. Montgomery council member George L. Leventhal (D-At Large) ordered the study in hopes of pushing his county to copy some of Fairfax's business-friendly practices. 'So many people [in Montgomery] ask me: How does Fairfax do it? Why is Montgomery's budget bigger than theirs? Why are their taxes lower?' Leventhal said."
Others yet, wanted to fight this creature. In a post titled "The Main Event: Fairfax v. Montgomery" Maryland blogger Marc Korman highlighted Montgomery County's superior transit access and concluded:
"I’m a Maryland guy through and through and love living in Montgomery County. The comparative report provides lots of interesting data and shows why Fairfax has grown, but I will take I-270, Normandie Farm, the Landmark Bethesda Movie Theater, and the Agricultural Reserve over Fairfax any day."
Many people pointed to our green space and labor policies as non-monetary reasons why there should be an asterisk next to our loss record. In actuality, it seems even some of our fears about jobs and taxes may have been misplaced, or at least premature. On top of our new job gains, Maryland Reporter recently flagged new analyses that dispute the existence of any meaningful link between tax increases and the flight of millionaires:
“The effect of tax increases on migration are, at most, small – so small that states that raise income taxes on the most affluent households can be assured of a substantial net gain in revenue....

The comptroller’s office reported that the number of millionaires declined in Maryland in 2008 and 2009. “But an examination of actual tax return data shows that the vast majority of this decline occurred not because people moved out of the state, but because their incomes fell below the $1 million mark due to the recession and stock market crash; they remained on the tax rolls, but in a lower tax bracket,” the report says.
Even Virginia Governor O'Donnell got into the regional spittin' match, comparing his recently projected budget surpluses to Maryland's continuing budget woes. This prompted Governor O'Malley to respond:
He can come on and defend the decisions he makes.… [W]e don’t believe celebrating a onetime over-attainment is really helpful to the public discussion and the honest adult discussion about the challenges that loom ahead.
But here's what I really want to know. Now that Maryland is ahead of Virginia on jobs, why can't we do as our opponents do and attribute our job growth to a millionaire's tax, friendlier labor environment, and other liberal policies?

More in Part 2 (of 2)

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