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.
Friday, April 09, 2010
Population, Jobs and Commutes in the Washington Region, Part Seven
Thursday, April 08, 2010
Population, Jobs and Commutes in the Washington Region, Part Six
In the first five parts of this series, we examined differing rates of growth in population, employment and real wages across the Washington region and explored historic shifts of commuting patterns among its Big Four jurisdictions: D.C., Fairfax, MoCo and Prince George’s. Today we will look at what those patterns mean for people traveling to work.
Below are the percentages of people traveling less than or more than thirty minutes to work, as well as mean travel times, for every jurisdiction in the region from the U.S. Census Bureau. 
It comes as little surprise that the jurisdictions with the longest travel times are all outer suburbs: Charles and Calvert Counties in Maryland and Stafford, Spotsylvania, Warren and Prince William Counties in Virginia. Small cities (like Fairfax and Fredericksburg Cities) and inner jurisdictions like D.C., Alexandria and Arlington have the shortest commutes. But Prince George’s County is an outlier. It has a higher percentage of its people traveling 30 minutes or more (61.3%) than many outer counties including Stafford, Spotsylvania, Calvert and Warren. It also has a longer average commute (35.9 minutes) than does Frederick (33.8 minutes). The failure of Prince George’s County to create high-wage jobs for its residents is exacting a stunning cost on them in their daily commutes.
There is also a notable difference between the Maryland and Virginia suburbs. In the five Maryland counties, 57.7% of commuters traveled thirty minutes or more. In Virginia, that percentage was 52.8%. Maryland commuters had a mean travel time of 34.8 minutes while Virginia commuters had a mean travel time of 33.3 minutes. Let’s remember that our dataset includes very distant outer suburbs in Virginia (like Stafford, Warren and Spotsylvania) while it excludes distant Maryland suburbs like Washington and St. Mary’s Counties.
Here are the average commute times for the Big Four in 2006-08:
District of Columbia: 29.5 minutes
Fairfax: 30.8 minutes
Montgomery: 32.9 minutes
Prince George’s: 35.9 minutes
And here are the percentages of commuters traveling at least 30 minutes to work:
District of Columbia: 48.9%
Fairfax: 51.8%
Montgomery: 56.0%
Prince George’s: 61.3%
For the three suburban jurisdictions, the rank order of travel times - Fairfax first, Montgomery second and Prince George’s third – is an exact match for the rank order in population growth, employment growth and real wage growth. This is not a coincidence. Creating abundant high-wage jobs near where residents live, which has been a specialty of Fairfax for the last few decades, pays off in lower commuting times.
We’ll wrap up our findings tomorrow.
Wednesday, April 07, 2010
Population, Jobs and Commutes in the Washington Region, Part Five
In Part Two, we saw that Fairfax County was adding population and employment, and seeing increases in real wages, at much higher rates than MoCo or Prince George’s County. And in Parts Three and Four, we saw how the commuting patterns to jobs inside each of the Big Four had changed since 1970. Here’s a summary of those changes.
D.C. was a larger jobs magnet in 2000 than it was in 1970, drawing in 271,803 net commuters – a 52% increase – from Fairfax, MoCo and Prince George’s. While it is true that there has been a slight rise in the number of reverse commuters, or D.C. residents working in the suburbs, that has been utterly swamped by suburban growth. The biggest source of commuters for the Big Four is Prince George’s County, which now has about as many cross-border commuters to the rest of the Big Four as Fairfax and MoCo combined. Following are two maps that show net flows among the Big Four in both 1970 and 2000.
Finally, consider the percentage of employed residents in each jurisdiction who worked inside that jurisdiction in both years.
Percentage of D.C. employed residents who work in D.C., 1970: 67%
Percentage of D.C. employed residents who work in D.C., 2000: 73%
Percentage of Fairfax employed residents who work in Fairfax, 1970: 40%
Percentage of Fairfax employed residents who work in Fairfax, 2000: 58%
Percentage of MoCo employed residents who work in MoCo, 1970: 51%
Percentage of MoCo employed residents who work in MoCo, 2000: 59%
Percentage of P.G. employed residents who work in P.G., 1970: 40%
Percentage of P.G. employed residents who work in P.G., 2000: 39%
Prince George’s County’s role in this system is obvious. Because it has not had robust employment or real wage growth, its residents are forced to work elsewhere. That fact combined with the jobs explosion in Northern Virginia is impacting our transportation network, creating a system of congested, one-way flows.
We’ll see what that means for commuting times in Part Six.
Tuesday, April 06, 2010
Population, Jobs and Commutes in the Washington Region, Part Four
Yesterday, we examined commuting patterns to jobs inside the District of Columbia and Prince George’s County. Today, we’ll look at who holds jobs inside MoCo and Fairfax.
Montgomery County
In 1970, MoCo had 164,948 jobs. Of those jobs, 110,587 (67%) were held by MoCo residents. Prince George’s residents held 19,454 (12%) of MoCo-based jobs and D.C. residents held 16,201 (10%). No other jurisdiction’s residents accounted for more than 3% of jobs in MoCo.
In 2000, MoCo had 419,168 jobs, an increase of 154% over 1970. Of those jobs, 267,130 (64%) were held by MoCo residents, 40,245 (10%) were held by Prince George’s residents and 22,860 (6%) were held by Frederick County residents. The percentage of MoCo jobs held by MoCo residents has not changed very much since 1970, perhaps because MoCo has seen similar levels of population and employment growth over that period. The percentage of MoCo jobs accounted for by D.C. residents has fallen from 10% to 5% because of D.C.’s absolute decline in population.
Fairfax County
In 1970, Fairfax had 115,137 jobs. Of those jobs, 78,126 (68%) were held by Fairfax residents. Prince William County residents held 7,835 (7%) of Fairfax-based jobs, Arlington residents held 6,758 (6%) and Alexandria residents held 6,400 (6%). No other jurisdiction’s residents accounted for more than 3% of jobs in Fairfax.
In 2000, Fairfax had 543,213 jobs, a staggering increase of 372% over 1970. Of those jobs, 155,675 (53%) were held by Fairfax residents and 56,124 (10%) were held by Prince William residents. MoCo, Alexandria and Arlington residents all accounted for around 4% of jobs based in Fairfax. The percentage of Fairfax jobs held by Fairfax residents has slipped since 1970 because Fairfax’s job growth has been so rapid that it cannot be met domestically. And in Part Two, we saw that Fairfax’s real wage growth was 68% between 1970 and 2008 – significantly higher than many nearby jurisdictions. That attracts residents of nearby counties to commute into Fairfax.
Tomorrow, we’ll put all of the Big Four’s commuting patterns together to show how their differing rates of population, employment and real wage growth are affecting regional commutes.
Monday, April 05, 2010
Population, Jobs and Commutes in the Washington Region, Part Three
In Part Two, we demonstrated significant differences between jurisdictions in the Washington region in population growth, employment growth and real wage growth since 1970. Those differences have impacted the region’s commuting patterns in very large ways since then.
The U.S. Bureau of Economic Analysis (BEA) offers many data series at the national, state and county levels. One series it offers is a matrix of commuting patterns by county. For each county, BEA estimates both the residence of job holders inside the county as well as the job locations of county residents. We gathered the former measure – residence of county job holders – for each of the Washington area’s Big Four jurisdictions in 1970 and 2000. Here is the story for each of the Big Four in both of those years.
District of Columbia
In 1970, D.C. had 504,611 jobs. Of those jobs, 220,277 (44%) were held by D.C. residents. Prince George’s residents held 96,482 (19%) of D.C.-based jobs, MoCo residents held 66,967 (13%) and Fairfax residents held 47,802 (10%).
In 2000, D.C. had 668,739 jobs, an increase of 33% over 1970. Of those jobs, 190,560 (29%) were held by D.C. residents, 126,135 (19%) were held by Prince George’s residents, 99,675 (15%) were held by MoCo residents and 92,238 (14%) were held by Fairfax residents. The drop in D.C. residents’ job-holding percentage of D.C. jobs is due to the absolute drop in D.C.’s population over that period of time. The percentage of D.C. jobs held by residents of the outer suburbs (defined as excluding MoCo, Prince George’s, Fairfax, Arlington and Alexandria) increased from 4% in 1970 to 14% in 2000.
Prince George’s County
In 1970, Prince George’s had 153,808 jobs. Of those jobs, 111,239 (72%) were held by Prince George’s residents. D.C. residents held 12,553 (8%) of Prince George’s-based jobs and MoCo residents held 11,027 (7%). No other jurisdiction’s residents accounted for more than 4% of Prince George’s jobs.
In 2000, Prince George’s had 293,883 jobs, an increase of 91% over 1970. Of those jobs, 155,675 (53%) were held by Prince George’s residents, 26,825 (9%) were held by MoCo residents and 26,264 (9%) were held by Anne Arundel County residents. The combined percentage of Prince George’s jobs accounted for by residents of Howard, Anne Arundel, Charles and Calvert Counties rose from 7% in 1970 to 21% in 2000.
The percentage of Prince George’s jobs held by Prince George’s residents has declined substantially since 1970, as it has in D.C., but for a different reason. D.C. has seen falling population since 1970, but Prince George’s has grown. In the case of Prince George’s County, since its real wage growth from 1970 through 2008 was a minuscule 29.4% - or less than one percent per year – its residents are commuting outside of the county for work in much larger numbers. As other jurisdictions create high-wage jobs, they are increasingly drawing Prince George’s County residents to fill them. And at the same time, residents of other Maryland counties are taking Prince George’s jobs in rapidly growing numbers. The implications for the region’s transportation network are significant.
We’ll examine MoCo and Fairfax tomorrow.
Friday, April 02, 2010
Population, Jobs and Commutes in the Washington Region, Part Two
Everyone knows that both population and employment have grown by significant amounts in the Washington Metropolitan Statistical Area (MSA) since 1970. But the jurisdictions in the area have grown at very different rates.
From the U.S. Bureau of Economic Analysis (BEA), here are the populations for every jurisdiction in the Washington MSA in 1970 and 2007.
The “Big Four” Jurisdictions – Fairfax County in Virginia, Montgomery and Prince George’s Counties in Maryland and the District of Columbia – accounted for 77% of the MSA’s population in 1970 and 64% of the MSA’s population in 2007. Consider their rates of population growth over those 37 years.
Fairfax: 111.9%
Montgomery: 79.5%
Prince George’s: 23.9%
District of Columbia: -22.1%
Again from BEA, here are the employments for every jurisdiction in the Washington MSA in 1970 and 2007.
The Big Four accounted for 77% of the MSA’s employment in 1970 and 71% of the MSA’s employment in 2007. Consider their rates of employment growth over those 37 years.
Fairfax: 475.1%
Montgomery: 178.1%
Prince George’s: 120.3%
District of Columbia: 20.8%
Here are the shares of the Big Four and the other counties of the region’s population and employment in 1970 and 2007.
The story of the last 37 years in terms of population and employment is simple. All of Virginia, including Fairfax, is on the rise. D.C. has hollowed out. Prince George’s County has slipped, especially in relative population. Montgomery County has held its own and the outer Maryland counties (Calvert, Charles and Frederick) have gained.
Finally, here is the average wage per job in 2008 dollars from BEA in 1970 and 2008.
Arlington and the District were the two highest wage jurisdictions in both 1970 and 2008. Let’s put aside both of them for a moment as their unique proximity to the Capitol and the Pentagon give them both labor market advantages that no other jurisdiction in the country enjoys. Here are the real wage growths for the remainder of the Big Four over the 38-year period.
Fairfax: 67.9%
Montgomery: 43.8%
Prince George’s: 29.4%
Whether we measure population growth, employment growth or real wage growth, the story remains the same: Fairfax first, Montgomery second and Prince George’s last, with the District varying. These realities impact the region’s transportation network in ways that we will begin examining in Part Three.
Thursday, April 01, 2010
Population, Jobs and Commutes in the Washington Region, Part One
The story of growth is an old one. Cities create jobs and attract residents, who eventually empty out into the suburbs. Those residents then drive back into the cities for work, loading roads with in-out traffic flows. As inner suburbs mature, produce their own jobs and become more dense, growth spills to the outer suburbs to create sprawl. Soon the entire regional transportation network becomes jammed, necessitating expensive new road and transit projects, endless congestion or both. Such is the inevitable result of decades of population and employment growth.
This is the conventional wisdom. For the Washington area, this paradigm holds but only up to a point. Why? Because it’s incomplete.
In a major new research project, MPW looks back on the history of population and employment growth, wage increases and transportation commutes in the Washington region from 1970 on. We examine these phenomena in every jurisdiction in the Washington Metropolitan Statistical Area (MSA), which includes the District of Columbia; Calvert, Charles, Frederick, Montgomery and Prince George’s Counties in Maryland; Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford and Warren Counties and Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas and Manassas Park Cities in Virginia and Jefferson County in West Virginia.
The Washington MSA from Wikipedia.
We find that the patterns of growth have defined employment opportunities and commutes across the region, creating winners and losers. Some jurisdictions have seen significant growth driven primarily by jobs. Others have become teeming bedroom communities. Some have seen strong wage growth while others have not. Some have emerged as major players in the D.C. area while others are struggling to keep up. And the unevenness of growth, both in type and magnitude, has impacted the region’s transportation flows perhaps even more than the sheer volume of new residents and jobs.
All of the above illuminates very different challenges in coming years for each of the area’s major jurisdictions. There may even be grounds for a potential common agenda across the region to balance growth, reduce its impact on our transportation network and spread the benefits of expansion more evenly around the area. With their fragmented structure, this is a difficult challenge for the state and local governments in our region. But if they cannot take it on and the imbalances of the past forty years carry forth into the future, no amount of transportation spending will be enough to remedy the unimaginable congestion that will follow.
We’ll start looking at population and employment counts in Part Two.
Thursday, February 04, 2010
The Main Event: Fairfax v. Montgomery
By Marc Korman.
There has been a lot of attention given to the Office of Legislative Oversight’s “Comparative Data on Montgomery County and Fairfax County.” Of course, Adam wrote up a thorough series on it but even the mainstream media got into the fun. But I would like to highlight two areas that did not make the headlines.
As Robert McCartney said in the Washington Post:[F]rom a national perspective, the two counties are virtually indistinguishable. Both are very prosperous, with excellent schools and public services. For example, out of more than 3,000 counties in the nation, per-capita personal income in Fairfax ranks 14th. Montgomery places 15th.
I repeat McCartney’s words because we should all remember we are dealing with two counties that are the cream of the crop. Residents of either jurisdiction are lucky to live where they do.
Still, some interesting differences emerge.
Transportation
The report finds that in 2008 the average work commute for Montgomery County residents was 32.9 minutes and the average for Fairfax residents was 30.5 minutes. That has caused some excitement because Northern Virginia is known for its clogged roads, even more so than Montgomery County.
But that number does not just include people driving to work, it also includes people taking public transit. As the report explains, Montgomery County has 12 Metro stations, 11 MARC station, and 80 Ride-On bus routes. By comparison, Fairfax has 5 Metro station, 5 VRE stations, and 65 Fairfax Connector bus routes. The end result is that 15% of Montgomery County commuters take public transportation to work compared to just 9% of Fairfax County commuters.
Why does that matter? Because many commuters actually trade a shorter commute in the car for a longer commute on a bus or train. There are a few reasons: Transit can sometimes be cheaper; some people do so for environmental reasons; many people do not have their own vehicle; and it can be more pleasant to sit on a train or bus for a few extra minutes napping than sitting in traffic listening to talk radio. The fact that more people take transit and that transit services appear far stronger in Montgomery County is an important factor of quality of life that is being overlooked. I think most people would happily take a 2.4 minute longer commute over buying a car, emitting pollution, or fighting the traffic.
Public Health
Much more troubling for Montgomery County is the data on public health. Although Montgomery County compares favorably to Fairfax with much lower rates of heavy drinking, smoking, and asthma, the other measured health risks were less favorable. Montgomery County has more uninsured, more people not participating in physical activities, more obese, and more people with cardiovascular disease.
But what really stunned me is Montgomery County’s much higher rate of new HIV diagnoses. The rate of new HIV infection in Montgomery County per 100,000 people is 24.3, compared to just 8.9 in Fairfax.
By comparison, according to the AIDS charity AVERT, the national average is just 12.7 cases per 100,000 people. But Montgomery County is in line with Maryland’s high incidence rate of 24.8 people per 100,000, compared to Virginia’s 8.2 per 100,000. Unfortunately, Maryland is second only to New York (24.9 per 100,000) among states, but also trails DC (148.1 per 100,000) and the US Virgin Islands (31.4 per 100,000). Maryland’s HIV infection rate is deeply troubling.
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.
Wednesday, February 03, 2010
MCPS Releases MoCo-Fairfax Comparison on AP Tests
MCPS Superintendent Jerry Weast has written a memo to the Board of Education comparing MCPS to Fairfax County Public Schools on Advanced Placement (AP) exam performance in 2009. The results are very close. Weast wrote, "Despite having 30,000 more students than Montgomery County, Fairfax students took just 1,379 more exams. Since 2006, the number of AP exams taken by MCPS students has increased 27.5 percent - nearly double the rate of growth in Fairfax." Weast went on, "While our enrollment is more diverse both racially and economically, MCPS's students had the same mean score on AP exams as Fairfax County - 3.3 out of 5." White and Asian-American students performed better in MoCo than in Fairfax, while Hispanic students performed better in Fairfax than in MoCo and African American students performed equally well in both jurisdictions. We reprint Weast's memo below.
The Leventhal Report: MoCo vs. Fairfax, Part Three
How do MoCo and Fairfax compare in economic terms?
Fairfax has been a more prolific creator of jobs than MoCo, passing MoCo in total employment in the mid-1980s. The report states that between 2002 and 2007, Fairfax’s job growth rate (14%) was almost double the rate in MoCo (8%).
Jobs in Fairfax pay more ($72,838 per year) than jobs in MoCo ($65,694). The report does not show whether that gap is due to a different mix of jobs in the two counties or to actual salary differences between like jobs. The two counties offered virtually identical salaries until the mid-1990s, when Fairfax began to pull ahead of MoCo.
In terms of per capita personal income, which includes other income sources than just wages and salaries, the counties are much closer.
The unemployment rate in both counties is lower than the national average, but it has been consistently lower in Fairfax than in MoCo for at least a decade.
There are many, many more statistics in the Leventhal Report than the ones we have discussed, including information on housing, crime, health and much more. But the bottom line of the tax, budget and economic data is this:
MoCo generally charges more taxes than Fairfax. MoCo’s local government spends more in per capita terms than Fairfax. At least in terms of public schools results, MoCo does not appear to hold a large edge – and maybe not any edge – over Fairfax. And Fairfax’s economy is a little bit more dynamic, in terms of job creation, high pay and low unemployment, than MoCo’s economy. In many respects, MoCo and Fairfax have more similarities than differences and both surpass national averages in almost every measurable way. But the Leventhal Report demonstrates a slight and increasingly noticeable competitive edge for Fairfax. Our policy makers at both the state and county levels need to keep that in mind when considering anything that affects that balance.
Tuesday, February 02, 2010
The Leventhal Report: MoCo vs. Fairfax, Part Two
How do MoCo and Fairfax compare on government spending?
The overall FY 2010 budgets for MoCo and Fairfax are almost identical in size. Fairfax is much more reliant on property taxes than is MoCo because Virginia does not allow its counties to charge income taxes. One important difference between the counties is that Fairfax gets more intergovernmental revenue, most of which is state aid ($966 million), than does MoCo ($855 million). That is because Maryland’s aid is mostly driven by wealth formulas, which sends taxes paid by MoCo residents disproportionately to other areas of the state.
In per capita terms, the MoCo government spends 9% more money than does Fairfax. The two jurisdictions’ school budgets are almost of equal size, but MoCo spends $421 million more from its general fund than does Fairfax. This is despite the fact that Fairfax’s 2008 population (1,015,302) is bigger than MoCo’s (950,680).
MoCo generally pays higher salaries to local government employees than does Fairfax, sometimes by significant amounts. The report does not state whether these salary differentials are due to differences in cost of living.
Fairfax has more public school students than does MoCo and spends 10% less per student. The Leventhal Report does not compare school outcomes, but we found that the two school systems were very closely competitive last summer. Does Fairfax get more bang for the buck in its school spending? Or does MoCo’s higher percentage of students receiving free and reduced price meals (FARMs) account for part of this difference?
MoCo levies higher taxes than Fairfax and its government spends more. Is it worth it? The residents of the two counties must answer that question for themselves, but the Leventhal Report shows conclusive evidence for both facts.
Tomorrow, we will look at economic performance.
Monday, February 01, 2010
The Leventhal Report: MoCo vs. Fairfax, Part One
Council Member George Leventhal asked the Montgomery County Office of Legislative Oversight (OLO) to produce a mammoth report comparing MoCo and Fairfax County on a very large number of measures. Leventhal has rendered a real service to MoCo because the data is necessary for further discussion of the always compelling topic of MoCo’s competition with Fairfax, to which we devoted a very long series last year. The eighty-page report is so gigantic that it cannot be readily consumed by most policy-makers, much less most county residents. But we intend to identify a few critical elements for our readers.
First, let’s discuss the findings of the report on taxes. Taxation rates are both a quality of life issue and a competitive issue for job creation. In terms of property taxes, Fairfax generally charges more than MoCo.
But that advantage for MoCo is probably overwhelmed by Fairfax’s low income tax rates. Virginia does not allow its counties to charge income taxes, while MoCo charges the state’s maximum allowable rate of 3.2% of income.
Fairfax also charges lower rates of land recordation and transfer taxes.
And Fairfax charges lower sales taxes on most items.
The data in the Leventhal Report illustrates conventional wisdom: Montgomery County and its state generally have higher taxation rates than Fairfax and its state. That will have a competitive impact. Tomorrow, we will compare government spending.
Monday, November 23, 2009
Hilton Spurns MoCo, Gets Nice Reward From Ike
This goes into the category of stories that are difficult to believe without direct evidence. But once again, dear readers, we have it and then some!
Have you ever been to the annual County Executive’s Ball? Oh, dahlings, it’s oo-la-la! All the top power brokers, money men, politicians and trophy wives come out to gossip, gawk and gorge. The spread is spank-a-licious! More than once, your blogger has crashed the joint just to pocket some of the candy bars on the hallway tables. (You can never fit enough Butterfingers into a slacks pocket!)
For years, the ball was held at the Marriott Conference Center in North Bethesda. And that choice was appropriate, given the fact that Marriott is headquartered in Bethesda and is one of the county’s largest employers. But this year, County Executive Ike Leggett is moving the event to the Hilton in Rockville.
Remember Hilton? Montgomery County engaged in a heated competition with Fairfax to land Hilton’s headquarters after it announced its move out of Beverly Hills. Well… maybe it wasn’t so heated. Our offer was blown away by Fairfax and we lost – badly. The episode contributed to the departure of former Director of Economic Development Pradeep Ganguly and helped spark a revolt by County Council Members. Now, Hilton is a happy Virginia company and the County Executive is awarding them his signature event.
Here’s an idea. Can we get Bethesda-based Lockheed Martin to move out and then reward them with a police helicopter contract?
Friday, August 28, 2009
The Economic Engine of Maryland, Part Eight
This series has easily been the most ambitious collection of essays we have ever attempted on Maryland Politics Watch. And all of our data points to one conclusion: the economic fate of Maryland depends on Montgomery County. And the economic competitiveness of Montgomery County depends on the quality of its public schools. That has to be a central priority for state policymakers in writing future budgets.
Consider the following facts:
In Part Two, we learned that Montgomery County accounts for one-fifth of the state’s employment and tax receipts, one-fourth of its personal income and one-third of its business profit. That last factor is especially important because business profit is necessary for job creation.
In Part Three, we learned that Montgomery County has trailed its chief competitor, Fairfax County, on every important economic growth measure over the last 25 years.
In Part Four, we learned that Montgomery County has higher tax rates in nearly all major categories except property than Fairfax.
In Part Five, we examined the close degree of competitiveness between Montgomery’s and Fairfax’s public schools.
In Part Six, our commentators agreed that the quality of the schools is necessary for attracting residents and jobs to Montgomery.
In Part Seven, we learned that the state’s aid to MCPS ranks third from the bottom among Maryland’s 24 jurisdictions in per pupil terms. Geographic Cost of Education Index (GCEI) spending, which benefits Montgomery, is a tiny part of the total aid budget. The state’s coverage of teacher pension obligations is the one large investment that disproportionately helps Montgomery.
All of these factors are linked. Montgomery’s economic competitiveness, which is critical to the well-being of the entire state, is dependent on its public schools. If the General Assembly considers cuts in aid and teacher pension funding that have disparate impacts on Montgomery next year, they are not just damaging one county. They are damaging the Economic Engine of Maryland. And if that engine breaks down, every resident of the Free State is going to suffer in the long run.
Lords of Annapolis, beware.
Thursday, August 27, 2009
The Economic Engine of Maryland, Part Seven
Montgomery County, the economic engine of Maryland, depends on its public schools to compete with Fairfax County. How much does the state contribute to Montgomery’s schools?
In absolute terms, the state contributes quite a bit to Montgomery County’s schools – over a half-billion dollars in direct aid in the last fiscal year. But in relative terms, the state’s investment is quite modest. Consider the following chart comparing the state’s per-pupil aid to public schools by county in FY 2009:
The above data illustrates that the state spent $3,943 per pupil in aid to MCPS in the last fiscal year. That ranks third from the bottom among the state’s 24 jurisdictions and is only 60% of the state average. MCPS aid accounts for only 10% of the state’s school aid despite the fact that Montgomery County has one-sixth of the state’s population. That is largely driven by a wealth formula that steers money away from “wealthy” school districts. One effect of the wealth formula is that MCPS derived just 19.9% of its budget in FY 2009 from state aid. Prince George’s County schools received 54.9% of their budget from the state.
What of the Geographic Cost of Education Index (GCEI), a state formula that gives more aid to school districts with a higher cost of education? The chart below shows (among other things) the amount of GCEI funding allocated by county in FY 2009:
For all its recent attention in the media, GCEI funding is a very small part of state aid to schools. In FY 2009, the state spent $5.3 billion on school aid. Only $75.8 million of that came from the GCEI program. Furthermore, Prince George’s County (at $23.6 million) was the biggest beneficiary of GCEI, not Montgomery (at $18.4 million). Baltimore City, by far the biggest recipient of state school aid in per-pupil terms, receives $13.0 million from GCEI.
The state does make one substantial school investment that disproportionately benefits Montgomery County: covering the cost of teacher pensions. Last September, we published the pension costs in both absolute and per capita terms by county. Montgomery led the state in total pension obligation spending ($131 million) and was third in per-capita terms behind Howard and Calvert Counties.
The reason the state spends more on Montgomery’s teacher pensions than on any other county is that Montgomery pays its teachers more than elsewhere in Maryland. Montgomery does that because of its high cost of living and its fierce competition for talent with Fairfax and other school systems. Excellence in education costs money. Montgomery figured that out long ago and has been delivering quality schools to its residents for decades.
We will conclude tomorrow.
Wednesday, August 26, 2009
The Economic Engine of Maryland, Part Six
How important are Montgomery County’s schools to the county’s economy? We asked some of our local leaders and here is what they said.
Valerie Ervin
County Council Member, Chair of the Council’s Education Committee
Former Member, Board of EducationMany people who move to the area make a conscious decision to come to Montgomery County because of the reputation of the Montgomery County Public School System. Most residents are proud of the school system and its tradition of excellence. In the current economic downturn, we cannot afford to be short-sighted about education funding.
Nancy Navarro
The Montgomery County School System helps drive the economic engine of the county and the state because its reputation for excellence translates into higher property values and its brand draws both residents and businesses to the county. The quality of the school system is especially important for middle class families who want to give their children the best education possible in a public school setting.
When competing for state dollars, Montgomery County is often portrayed as the city on the hill, where there are no challenges or issues affecting residents. Montgomery County must begin to describe the variety of issues impacting its schools and the lives of its children—we are talking about everything from students arriving at the school house door with interrupted educations, those who cannot speak English, and even those who are transferring from private to public schools because their parents can no longer carry the financial burden.
We need to continue to advocate for full funding for our schools to retain and keep our outstanding teachers, who work tirelessly for our students, and to fund school construction projects to maintain class size. Now is not the time to retreat from our obligations. As one of the main drivers of Maryland’s economic engine, the state has a stake in our continued success. Turning back the clock now hurts all of us.
County Council Member
Former President, Board of EducationIt is important that the rest of the state understands that, like County Executive Ike Leggett likes to say, Montgomery County is not an ATM machine to be accessed at will. It is important for the state to understand that an economically viable Montgomery County is in the best interest of the state as a whole. Montgomery County Public Schools is in turn the crown jewel of our county; our economic fortunes are intricately tied to the fortunes of MCPS. A distressed school system spells doom for our economy as we witness the flight of individuals, families and businesses to more education friendly jurisdictions like Fairfax County. This would affect local revenues and in turn would affect the state's collection from Montgomery County. In summary, a demand that the state maintains its fiscal obligation to Montgomery County is not self-serving - it is the right thing to do and the smart thing to do in the interest of the state of Maryland.
George Leventhal
County Council MemberI think the generally-perceived high quality of Montgomery County schools help to make the county very competitive if businesses are considering locating here versus Prince George’s County or the District of Columbia. Versus Fairfax County, not so much. Fairfax County also has a very strong school system. I personally prefer living in Montgomery County, but I am not confident that statistics would support the assertion that it is more attractive to locate a business here than Fairfax County.
Finally, one of our most intelligent (and most secretive) informants had this to say:
Montgomery elected officials and residents need to consider very carefully whether being competitive with Fairfax in economic development is something that we want. There are certainly benefits to having a healthy tax base and job base. On the other hand, more business can translate to more traffic and construction of more housing, and those things are not popular. We seem to have contradictory impulses when it comes to attracting business. Our political culture often rewards those who are hostile to business. We may have taken for granted that Montgomery County will always be attractive to investors, and we may find that is not as true as we once thought. In the current constrained economic environment, we are finding out what “slow growth” really feels like.Both Maryland and Montgomery County are unfriendly to business interests. It’s not just that the county and state are high tax and stiff regulatory environments; those are bad enough. Worse, there is a prevailing air that business, in and of itself, is inherently suspect. In a highly regulated environment, decision-making is in the hands of a relative few, a small number of politicians and regulators. There is a wrongheaded assumption that government, simply because of who and what it is, will automatically make the best, fairest decision on behalf of the people. The more regulated an environment is, and the more decision-making is concentrated in the hands of a few, the more political the process is apt to be.
Montgomery County is the economic engine of Maryland, and part of what enables that engine to keep up with Fairfax is the quality of our public schools. In Part Seven, we will look at how the state contributes to Montgomery’s schools.
Two things keep Maryland and Montgomery County afloat: federal largesse, due to proximity to the Nation’s Capital and research funding (NIH, Hopkins, FDA, etc), and education. There is nothing else to fall back on. We’re a two-legged stool. The education level of the workforce in this area is very high and is indeed an asset to business. If that is damaged, we’re in deep trouble. Suddenly, Maryland becomes even less competitive than it already is against Virginia and others with a more friendly business environment. We’re teetering on the brink. The county and state already have damaged the business environment, and without educational support, people will rightly ask: Why should I go to an area with high cost and traffic congestion and high regulation, when there are other areas, like North Carolina, with a lower cost of living, less traffic and more openness and creativity? We need to stop thinking we’re so much smarter than everyone else and start competing more effectively.
Tuesday, August 25, 2009
The Economic Engine of Maryland, Part Five
Montgomery County and Fairfax County, the economic engines of their respective states, have much in common. One characteristic they share is excellent schools.
Residents of Montgomery and Fairfax are virtually obsessed with their school systems. Most parents do whatever they can to get their kids into the best schools with the best programs and the best teachers. Both counties use their schools as selling points for new residents and new businesses. And the sales pitch is warranted because these two counties have some of the best public schools in America.
Consider the following benchmarks:
Newsweek Top 100 High School Ranks, 2008
Fairfax
55. Langley, McLean, VA
59. George Mason, Falls Church, VA
74. W.T. Woodson, Fairfax, VA
95. Lake Braddock, Burke, VA
99. McLean, McLean, VA
Montgomery
32. Richard Montgomery, Rockville, MD
60. Wootton, Rockville, MD
64. Bethesda-Chevy Chase, Bethesda, MD
69. Walt Whitman, Bethesda, MD
76. Walter Johnson, Bethesda, MD
98. Winston Churchill, Potomac, MD
SAT Scores, Class of 2008
Fairfax: Critical Reading 547, Math 565, Writing 542, Total 1654
Montgomery: Critical Reading 532, Math 549, Writing 536, Total 1616
Composite ACT Scores, Class of 2008
Fairfax: 23.7
Montgomery: 23.8
Total Public Schools Budget, FY 2009
Fairfax: $2,685,250,588
Montgomery: $2,543,224,621
Cost per Pupil, FY 2009
Fairfax: $13,340
Montgomery: $15,252
Percent of Graduates Continuing Education, FY 2009
Fairfax: 91.2%
Montgomery: 92.6%
Dropout Rate, FY 2009
Fairfax: 1.67%
Montgomery: 2.9%
Montgomery may not be able to compete with Fairfax on low tax rates, but it can and does compete very well on the basis of school quality. In fact, Montgomery’s high level of educational investment is one of the best things it can offer the business community. We asked a number of our leaders about the importance of the schools in attracting business. We’ll find out what they had to say in Part Six.
Monday, August 24, 2009
The Economic Engine of Maryland, Part Four
Montgomery County and Fairfax County are the economic engines of their respective states. Over the last 25 years, Fairfax has passed Montgomery on nearly every economic measure. But over the last 5 years, Montgomery has fared better. Today we look at one aspect of how the two counties compete: their relative tax rates.
One fact that is not commonly acknowledged is that Montgomery charges lower property tax rates than Fairfax. Here are the rates in effect during Fiscal Year 2009:
While Montgomery’s rates are lower, the gap narrows when residential rates are compared to home values. During the 2005-07 period, Montgomery charged 0.7% of its median home value in taxes while Fairfax charged 0.8%. Few homeowners would notice such a tiny difference.
But the primary reason Montgomery’s property tax rates are lower than those in Fairfax is that Montgomery’s revenue base is much more diverse. For example, Fairfax receives no income tax. Here are a variety of other tax rates for Fiscal Year 2009:
On every other measure, Fairfax residents and businesses pay lower taxes than their counterparts in Montgomery. The biggest gap is in income tax rates, especially at the top. We do not have the comparative tax burden between the two counties, but on the state level Maryland (ranked 4th in the nation by the Tax Foundation) far exceeds Virginia (ranked 18th). There is no way that Montgomery County, a high-tax county in a high-tax state, can compete with Fairfax on the basis of low taxes.
But there is one factor on which Montgomery is intensely competitive with Fairfax: the quality of the public schools. We’ll examine this in more detail in Part Five.
Friday, August 21, 2009
The Economic Engine of Maryland, Part Three
In Part Two, we examined Montgomery County’s role in the Maryland’s economy. The county accounts for one-fifth of the state’s employment, one-fourth of its personal income and one-third of its business profit. Those factors make the health of the county’s economy a key component of the health of the state’s economy. But Montgomery County is not invulnerable. It has a direct competitor right across the Potomac: Fairfax County, Virginia.
In many ways, Montgomery and Fairfax are twins. Both have close to a million people. Both have large private sectors fueled by substantial federal government spending. Both have populations that are increasingly diversifying. Both have quality schools. And both are economic engines for their states.
But Fairfax has been outcompeting Montgomery from an economic perspective for a long time. According to the Bureau of Economic Analysis, here are how the two counties stack up on seven economic indicators for the most recent 25-year period available (1971-2006):
Fairfax’s per capita personal income has grown 24% faster than Montgomery’s over the last 25 years. Fairfax’s population, total personal income and dividends, interest and rent income have grown nearly 50% faster than Montgomery’s. Fairfax’s employment, wages and salaries and proprietor income have grown roughly 2.5 times as fast as Montgomery’s. In 1971, Montgomery led on every one of these seven measures over Fairfax. In 2006, Fairfax led on six of seven.
But the story is not quite that simple. Over the most recent five-year period, Montgomery has competed much better with Fairfax. Here are our benchmarks between 2001 and 2006:
During this period, Montgomery beat Fairfax on four growth measures (population, personal income, dividends, interest and rent and proprietor income), trailed on two (employment and wages and salaries) and virtually tied on one (per capita personal income). This data does not prove that Montgomery has turned the corner. But it does show that Montgomery is still capable of competing with Fairfax in generating economic opportunity for its residents. And that provides hope for both Montgomery and the state it supports.
In Part Four, we’ll look at one aspect of how Montgomery and Fairfax match up: their comparative tax rates.
Thursday, August 20, 2009
The Economic Engine of Maryland, Part Two
Montgomery County is often called the “economic engine” of Maryland. But how important is it to the state’s economy? Let’s find out.
The Bureau of Economic Analysis provides the following estimates of population and employment by Maryland county in 2006:
So Montgomery accounts for 16.5% of the state’s population and 19.3% of its employment. This is significant, although perhaps not dominant. But this is only one aspect of the county’s role. Consider personal income and total wages and salaries paid in 2006:
Montgomery accounts for 24.0% of the state’s personal income and 22.7% of its wages and salaries. This far outpaces second-ranked Baltimore County (with 14.6% of personal income) and Baltimore City (14.4% of wages and salaries). But that still understates the county’s impact. Consider dividends, interest, rent and proprietor income in 2006:
Montgomery accounts for one-third of all business income – dividends, interest, rent and proprietor income – in the state. That is roughly double the business income created in runner-up Baltimore County and more than Anne Arundel, Carroll, Frederick, Harford, Howard and Prince George’s Counties combined.
The state’s tax base benefits immensely by the inclusion of Montgomery County. Shown below are income and sales tax receipts by county for FY07, the most recent complete year available. These two sources constitute approximately 80% of the state’s general fund revenues.
Montgomery accounts for 25.8% of the state’s income tax receipts, 13.0% of its sales tax receipts and 21.2% of combined receipts in both categories. (Corporate income taxes are not included in this data.)
Tax receipts are important, but taxes do not appear out of thin air. They depend on employment, which in turn depends on business profits. The truly critical role Montgomery County plays in the state’s economy is to act as its principal base of profit and job creation. By generating one-fifth of the state’s employment, one-fourth of its personal income and one-third of its business profit, Montgomery’s economic health directly determines the state’s well-being.
But as big and robust as it is, Montgomery County is far from invulnerable. It has a direct competitor across the Potomac River. And its ability to go head-to-head with its powerful rival has a colossal impact on Maryland’s future. More on that in Part Three.
