Jobless rate in Md. sets year of lows

THE BALTIMORE SUN

Maryland's booming economy sent its unemployment rate tumbling to 3.3 percent in July, marking a full year that the state has posted record monthly lows for joblessness.

That figure, announced at a State House news conference yesterday, is down from 3.6 percent in June this year and in July 1999. Maryland's rate is almost a full percentage point under the nationwide unemployment rate of 4.2 percent and about half the levels posted during the recession of the early 1990s.

Gov. Parris N. Glendening used the occasion to celebrate what he called "the strongest economy in the history of the state, sustained 12 months in a row."

The governor also noted new revenue figures showing that the state will have $151 million more than expected to spend in its next budget. He said he expects to use the money to deal with his "top priorities" of education and Smart Growth, his promotion of green space and planned development.

He said he does not expect to propose any significant tax cuts, contending that business leaders are putting a higher priority on work force development and "quality of life" issues.

The falling unemployment continues a trend of several years, but it was not long ago that a 3.3 percent unemployment rate in Maryland would have been unimaginable, according to Towson University economist Anirban Basu.

"It wasn't too long ago that economists were referring to 6 percent or 5.5 percent as full employment nationally," said Basu, director of applied economics at RESI, the university's consulting arm.

Basu noted that Maryland has added at least 57,000 new jobs over the past 12 months.

"In previous years, a 40,000-job year was fabulous," he said. "You would have considered the economy to be humming."

He said a 3.3 percent rate was especially noteworthy because it occurred in summer, when joblessness traditionally rises.

The drop in unemployment has affected all parts of the state, though a stubborn pocket remains in Baltimore. The city's July rate was 7.3 percent, compared with 7.8 percent in June and 7.4 percent the previous July.

In some fast-growing counties, unemployment was practically nonexistent. Montgomery, with its white-hot biotechnology and computer sciences industries, led the way with 1.6 percent. Howard and Frederick counties weighed in at 1.8 percent.

Traditionally high-unemployment parts of the state are also sharing in the prosperity. Western Maryland's Allegany County, burdened with double-digit joblessness in the early 1990s, was down to 5.7 percent from 6.6 percent in June.

On the Eastern Shore, Somerset County's rate also fell to 5.7 percent from 7 percent the previous month.

Glendening cited the unemployment numbers as proof that the economic policies of his administration and the Democratic-led General Assembly are working.

Basu said that while government has played a role in laying the groundwork for prosperity, the driving force has been the state's thriving high-technology companies.

"The lion's share of the credit has to go to private sector actors such as Ciena and Corvis," Basu said, citing two booming high-tech firms.

Glendening beamed when asked about how Maryland's performance compares with Virginia's, whose example has long been cited by the governor's foes as a model for economic development.

The governor noted that the latest figures show Maryland 11th in the country in job growth, with Virginia coming in 18th.

Furthermore, he said, the jobs being created in Maryland are largely highly skilled positions with good salaries.

"If you want quality of life and the second-highest family income in the country, come to Maryland," said Glendening, who has sparred frequently with Virginia's Republican Gov. Jim Gilmore over their differing approaches to growth.

Glendening said his plans for maintaining Maryland's prosperity do not include tax cuts.

"At this point we should focus on significant further investment in education," the governor said, noting that he is getting requests for increased school aid from all parts of the state.

However, Del. Robert J. Kittleman, the House minority leader, said Maryland is falling behind other states in cutting taxes.

"We're becoming less and less business-friendly," the Howard County Republican said.

"It's not going to go on forever. You've got to be competitive in the long run," Kittleman said.

The governor also said he will soon announce significant new spending plans for mass transit systems in all parts of the state - an initiative he has linked to his Smart Growth policies.

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