Howard County: Despite Challenges, Mostly Sunny

By Ken Ulman



Howard County's economy remained relatively strong in 2008 amidst a challenging economic climate. But with the recession expected to deepen as we enter 2009, we are bracing for a cold winter.



The Good News

Howard County still reports the lowest unemployment rate in the state of Maryland for the third consecutive year, with a jobless rate well below state and national averages. Not only are many Howard County residents employed in high-level positions, those jobs translate into a higher standard of living for local residents and their families.

During the year, the U.S. Census Bureau again acknowledged Howard County as the third wealthiest county in the nation, with a median household income above $101,672. The average weekly wage in the county is $982 or $51,064 annually. Additionally, more than 3,600 net new jobs were created by companies in Howard County during 2007 (the last full year for which statistics are available). Amidst economic uncertainties, Howard County's experience in solid job growth and strong wages were consistent with previous years.



Continued Slowing in 2009

Experts are predicting that the recession will continue well into 2009. In past recessions, Howard County has been slower to enter a downturn, usually suffered less severe impacts and emerged from recession sooner that other jurisdictions. But that good news is small comfort, as a number of businesses in Howard County are cutting back to survive and a few have closed their doors.

The residential housing market has been sluggish for much of 2008 and does not promise to be any better in 2009, at least for the first half of the year. Industry sectors that depend on strong home sales, such as construction trades, brokers, banks, title companies and the like, have experienced major pain. And that was before the Wall Street meltdown that only made matters worse.

But in Howard County, we see signs of hope. The national median home price is down 12.8% from one year ago, while Howard County's median home price is down 7%.

The crisis on Wall Street has generated a level of consumer confidence that is lower than it has been in decades. Coupled with the recession, optimism is hard to find as we enter 2009. Until the Federal Reserve is able to stabilize financial institutions, a new Obama administration implements sweeping reforms and consumers regain their confidence, the recession will continue.



Looking for the Positives

Over the years, Howard County has benefited from its superior location in the middle of the Baltimore-Washington Corridor, which is one of the nation's largest and wealthiest metro areas. Being at the heart of this dynamic, bi-metropolitan marketplace generates strong economic momentum from both cities.

This superior location is enhanced by the fact that one of those two cities is the nation's capital. Our proximity to Washington, D.C., and the many government agencies in this region provides substantial insulation from the recession that grips the country. In good times, we benefit from billions of dollars of federal spending in this region, a considerable amount of which goes to Howard County companies.

Because a majority of this federal procurement is secured in multi-year contracts for a variety of goods and services, a leading sector of Howard County's economy does not feel recessionary pain. This continued spending has positive "multipliers" into other sectors.

This is a significant reason why we are optimistic about the length and depth of this recession in Howard County. We will fare better than most other jurisdictions.



Exercising Caution

Nevertheless, we are in a recession and county government is as impacted by the downturn as the private sector. We have had to make difficult decisions to maintain our priorities.

Although property tax revenues are leveling off and income taxes are dropping, we are committed to providing the quality level of services that Howard County citizens have come to expect from their government. Like the private sector, the administration will maintain its focus on our core businesses - education, public safety and protecting the environment.

Prudent financial management has served us well. Although we do not anticipate a budget deficit in fiscal 2009, we have implemented a number of measures to reduce the rate of spending during the next six months. Travel to out-of-town conferences has been lessened; we will not be making major purchases of furniture and equipment; and positions that become vacant will be filled on a case-by-case basis. We expect our budget to be in balance at the end of the year, but we will need to work at it.

Looking ahead, fiscal 2010 (which starts on July 1, 2009) looks to be even more difficult. Hopefully, the recession will have ended, but revenues to county government will lag for much of the year. We anticipate no significant growth in property taxes and income tax revenues are projected to continue their downward trend. As a result, the budget we will be developing in February and March will be very lean, reflecting a continuation of the controls we have in place today.

Financially, Howard County is very strong, but we still need to watch our spending carefully to avoid a budget deficit.



County Growth Areas

In Howard County, we still see a number of positives:

¥ The Columbia Gateway Business Park continues to be one of the major employment centers in Howard County. In 2008, corporate headquarters like Merkle and Aegus Mobile have joined other regional or national headquarters in the commerce center. Integral Systems will join those companies in early 2009. Several defense contractors such as General Dynamics, C4 Systems and L3 Communications are also new Gateway "residents."

¥ Construction in Howard County continues despite bleak national economic performance. Corporate Office Properties Trust, Abrams Development, Orix and The Trammell Crow Co. all have delivered speculative office projects to the inventory of available space in Gateway. The availability of ready-to-occupy Class A office space gives Howard County a competitive advantage in attracting companies with short timelines for occupancy.

¥ Maple Lawn, which is located at the mid-point of the Corridor, has grown dramatically since its inception. In 2009, developer Greenebaum, Rose & Associates is poised to build the fourth office structure and leasing activity was brisk throughout the Maple Lawn business district at year end. Looney's, a new restaurant, is set to open in February; and the community's first grocery store, Harris Teeter, will open to serve the Maple Lawn community in the spring.

¥ The revitalization of the U.S. Route 1 Corridor continues. As many as six mixed-use projects containing residential, retail and commercial components are currently under development and the county's first Tax Increment Financing (TIF) district may be created along the MARC commuter train system in Howard County. In addition, a Design Advisory Panel (DAP) has been created to review development, redevelopment and construction projects within the Corridor. DAP will ensure excellence in architecture and site design for this important Corridor.

¥ In 2009, the master plan for downtown Columbia should be completed and the blueprint for the future of Howard County's largest community will be in place. The new plan will continue to enhance Jim Rouse's vision to make Downtown Columbia a diverse, mixed-use, livable, physically distinctive and human-scaled place with a range of housing choices and recreational, civic, cultural and educational amenities.



BRAC Approaches

The impact of the 2005 Base Realignment and Closure (BRAC) decision has begun. Construction is underway on the Defense Information Systems Agency's (DISA) new $450 million, 1 million-square-foot office complex on Fort Meade. New facilities for the consolidation of a number of defense information agencies is also under construction and new space for the consolidation of agencies that adjudicate security clearances is also being built. The impact on the construction industry in the region is very positive.

The Howard County BRAC Task Force continues to provide us with relevant, actionable information as we anticipate other positive impacts, as well as challenges, upon our infrastructure as we anticipate the full impacts of the base realignment at Fort Meade. During 2009, our county's task force will continue to work through regional BRAC issues and opportunities with the eight counties and two cities that compose the Fort Meade Regional Growth Management Committee.

The full impact of base realignment for our region will be felt in late 2010 and early 2011, but we are positioning Howard County for these impacts now. Certainly, the economy will have recovered long before these dates. When the impacts of BRAC sweep across the region, Howard County's economy will be even stronger.



Ushering in 2009

We enter the new year with a renewed determination to minimize the impacts of the recession. We will manage our financial resources, and we will maintain our commitment to providing quality services to the citizens of Howard County.

While some sacrifices are necessary, we will not decrease our focus on the education of our children, the safety of our citizens and the protection of our environment.

2009 will be a difficult year for all of us. But, there is no better place to be in good times and in lean times than Howard County.



Ken Ulman is the county executive of Howard County.