Friday, April 09, 2010

Population, Jobs and Commutes in the Washington Region, Part Seven

Differing rates of population, employment and real wage growth have resulted in greater rates of cross-border commuting since 1970. That commuting, which is often skewed towards the west in the morning and the east at night, is stressing the region’s transportation network. This sets up a range of challenges for each of the Big Four jurisdictions that they must meet in the future or face continued congestion without end.

First, let’s summarize the statistics on the Big Four that we gathered earlier in the series.

Population Growth, 1970-2007

Fairfax: 111.9%
Montgomery: 79.5%
Prince George’s: 23.9%
District of Columbia: -22.1%

Employment Growth, 1970-2007

Fairfax: 475.1%
Montgomery: 178.1%
Prince George’s: 120.3%
District of Columbia: 20.8%

Average Wage per Job, 2008

District of Columbia: $74,771
Fairfax: $70,147
Montgomery: $61,757
Prince George’s: $50,417

Real Wage Growth, 1970-2008

Fairfax: 67.9%
District of Columbia: 53.1%
Montgomery: 43.8%
Prince George’s: 29.4%

Number of Commuters to Jobs in D.C., 1970

Prince George’s: 96,482
Montgomery: 66,967
Fairfax: 47,802

Number of Commuters to Jobs in D.C., 2000

Prince George’s: 126,135
Montgomery: 99,675
Fairfax: 92,238

Average Commute Time, 2006-08

District of Columbia: 29.5 minutes
Fairfax: 30.8 minutes
Montgomery: 32.9 minutes
Prince George’s: 35.9 minutes

Percentage of Commuters Traveling at least 30 Minutes to Work, 2006-2008

District of Columbia: 48.9%
Fairfax: 51.8%
Montgomery: 56.0%
Prince George’s: 61.3%

On almost all of these measures, the rank order is the same: Fairfax first, Montgomery second, Prince George’s third and the District varying. Why? Our best guess is that it is a function of two factors that heavily impact economic development: taxes and schools.

Here is a tax comparison of some of the Washington area’s jurisdictions, helpfully (and perhaps not coincidentally) supplied by Fairfax:

Fairfax has relatively moderate taxes and excellent schools. It is no surprise that they lead on most of our economic performance measures. MoCo’s schools are also excellent (though not decisively better than Fairfax’s) and its taxes are relatively high. Both the District and Prince George’s County suffer from twin problems: high taxes and poor schools. D.C. is partially protected from the economic development implications of those facts because of its location, but Prince George’s is not.

Each of the Big Four now faces a different set of challenges.

Fairfax will have to deal with the consequences of its success: crowded schools and roads. It is virtually inevitable that Fairfax will have to raise revenues to finance more infrastructure. In fact, it is already heading down that road with toll hikes and a commercial property tax district to finance the Silver Line and a special commercial property tax to pay for other transportation projects. MoCo went through similar problems after explosive growth in the 1980s. Its development impact taxes never recovered the full cost of paying for new infrastructure, but MoCo’s growth did slow significantly in later years.

Montgomery is now number two. It can no longer pretend that businesses and residents will come here simply because “we are Montgomery County.” MoCo will have to maintain its school quality and moderate its tax increases – not an easy feat in these days of perpetual budget deficits. If it does not make an effort to compete, MoCo’s growing wage gap with D.C. and Fairfax will cause its residents to increasingly commute to jobs elsewhere and face the staggering travel times suffered by inhabitants of Prince George’s County.

The District’s high taxes and poor schools have caused a great hollowing out of population over the past few decades, although that trend may be easing. While D.C. politicians often call for commuter taxes, it is the city’s own ineffective government that has caused many workers to buy houses across the border. The single most important determinant of whether D.C. can attract new residents over the long term is the success or failure of its current effort to improve its public schools. It’s too soon to judge whether Superintendent Michelle Rhee’s changes will be successful, but to have any chance of producing real change, she must greatly outlast the average superintendent tenure of three years. If D.C. goes back to its rotating cast of in-and-out school leaders, its population growth will stall and the morning backups on its streets to the suburbs will continue.

The consequence of the poor schools in Prince George’s has not been to hamper population growth, but rather has been to discourage the creation of high-paying jobs. Prince George’s residents benefit from relatively low-cost housing stock compared to D.C. and the other inner suburbs, but they pay for it greatly with long commutes across their borders. Prince George’s may have the toughest challenge of all: attracting good jobs, improving its schools and restraining its taxes, all in times of budget austerity.

The difficulties above are immense. But the Washington region contains many of the world’s smartest people, is one of the wealthiest places on Planet Earth and benefits mightily from the presence of the federal government. It must succeed in correcting its imbalances as a region. If it does, residents of every jurisdiction will benefit from less stress of long commutes on the region’s transportation network. If traffic flowed evenly in both directions – or better yet, if people lived closer to their jobs – there would be no need for multi-billion dollar projects like the ICC or widening I-270 or the Washington Beltway. But if the Washington region continues to see lopsided growth in some places alongside stagnation in others, then no amount of tax increases or project construction will ease the traffic congestion that is sure to follow in coming years.