Poverty and income essentially unchanged

Maryland's poverty rate and median household income were essentially unchanged in 2012, according to new data from the American Community Survey.

• 2012 MD Poverty Rate: 10.3 percent
• 2012 MD Median Household Income: $71,122

The poverty rate has steadily increased since the beginning of the Great Recession, from 8.1 percent in 2008 to its current peak. This mirrors the story in most of the rest of the country, as poverty remains high despite the economic recovery. I suspect this graph has something to do with it.

Maryland continues to have the highest median household income of any state at more than $71,000 (though we also know that 35 percent of Maryland households make less than $50,000). The state's median household income is about $1,000 more (in 2012 dollars) than it was in 2000.

Our neighbors to the south actually saw a decline in median household income, so much so that Virginia is now about $1,000 below (in 2012 dollars) their 2000 level. Virginia's poverty rate is also higher, at 11.7 percent in 2012.

MD revenue projections down $61.9 million

Yesterday, the Board of Revenue Estimates released its latest figures for Fiscal Year 2014. The Board now projects General Fund and Budget Restoration Fund revenues of $15.4 billion. While this is less than the previous projection, revenues are still expected to rise 3 percent from FY 2013.

Looking closer, the revisions are quite different depending the source of the income. The personal income tax estimate has been revised upward by $114 million, but corporate income taxes are now projected to be $67 million lower. Sales and use tax, state lottery receipts, and a variety of other revenue sources are also projected to perform below previously anticipated levels.

The reason for these downward revisions continues to be the stubbornly lackluster economic recovery, and the fiscal uncertainty emanating from Congress. That's why Maryland must continue to take the initiative by raising the funds necessary to keep investing in what makes our state great (education, health care, innovation, a strong safety net), regardless of what happens at the federal level.

Wash Post: "How the 1 percent won the recovery, in one table"

The Washington Post has a great table up today, showing the results of a study (PDF) by economists at UC Berkeley, the Paris School of Economics, and Oxford University using Internal Revenue Service statistics. The bottom line: the top 1 percent have captured 95 percent of real growth in average income since the end of the Great Recession. No wonder income disparity is at its highest level since the First World War.

Why is that a problem? There are lots of reasons, but for just one look no further than another new study, this one from Ohio State University - children bear the brunt of economic inequality.

Here in Maryland we know that income inequality exists between different communities, ethnic groups, and education levels. Income for households in the top 1 percent increased 240 percent since 1979, while it grew just 10.8 percent for households in the bottom fifth.

That's why we continue to push for expanded programs to increase educational attainment, job opportunities, and the social safety net. As we begin preparing for the 2014 legislative session we will continue to support raising the minimum wage, providing workers with earned paid sick leave, and increasing the refundable state earned income tax credit.

The Week Ahead

Last week, we posted a blog item about the state allocating $9 million from the reserve fund to back-fill federal sequester cuts for head start, senior citizen services, and other programs. We also covered the disappointing national stats on jobs and unemployment.

And we said goodbye to our Director, Neil Bergsman, who has moved over to the Capital Budgeting Office in DBM.



For the week of September 9-15:

Tuesday, September 10th

• In Annapolis, the legislative Joint Audit Committee will hear audit findings on the Baltimore City Liquor Commission.
• Also in Annapolis, the Task Force to Study the Applicabilityof the Prevailing Wage Law holds its organizational meeting and overview.  The Task Force is required to report by December 31.
• The US Bureau of Labor Statistics releases data on US consumer expenditures in 2012.

Thursday, September 12th

• In Annapolis, the Senate Budget and Taxation Committee hears about the solicitation for public-private partnerships related to the “Purple Line” transit project in the Washington-metro area.
• The Capital Debt Affordability Committee also meets in Annapolis to review the state’s capital program. The Committee will issue its recommendations on the size of next year's capital budget on September 25.

Bleak national employment picture changed little in August

The US Bureau of Labor Statistics today announced the national employment and unemployment numbers for August.

The economy added 169,000 jobs - better than July, but not nearly the job growth we would expect in even an average economic recovery.

The unemployment rate edged down to 7.3 percent from July's 7.4 percent. At 7.1 percent in July, Maryland's unemployment rate is now approaching the national average. Historically, Maryland unemployment has remained significantly below the US rate.

The number of long-term unemployed (over 27 weeks) was essentially unchanged at 4.3 million. last week, we discussed the unprecedented levels of long-term employment, and how it affects communities, families and children in addition to the workers themselves.

Maryland Allocates Funds to offset Federal Cuts

Maryland Governor Martin O'Malley announced the allocation of $8.8 million in reserve funds to offset federal budget cuts. This action commits nearly $9 million of the $100 million set aside during the 2013 legislative session to offset the results of federal budget actions.

The Governor's statement says:

Nearly 500 low-income children will be able to participate in Head Start programs that will prepare them to enter school ready to learn ($4.1 million). Approximately 3,000 individuals will receive the substance abuse prevention and treatment services they need ($1.6 million). Approximately 3,000 older adults will receive 180,000 meals, 2,500 seniors will have access to health screenings, and 200 seniors will be provided with home and community-based services, including personal care and adult day care. ($1.4 million). Fifty individuals in need of vocational rehabilitation services will receive those services without delay ($800,000). Approximately 7,000 people will receive job placement and training assistance ($500,000). Seventy-five adult education classes serving about 800 students will be offered as planned ($400,000).

Congress will confront another set of deadlines shortly as the federal fiscal year ends without an approved budget one September 30, and the Treasury runs out of authority to issue new debt in mid-October.

The continued federal budget impasse harms Maryland in two ways. First, the direct budget cuts affect services currently received by Marylanders. Secondly, the reduced federal activity in paying salaries and in buying goods and services hurts Maryland's economy.

These temporary back-fills from state funds are helpful in reducing the hardships to families and individuals that would occur if the federal cuts took their full effect. In the long run, however, Congress must do its job of approving a regular budget for the nation on a timely basis.

The Week Ahead - Pro Football Kickoff Edition

Pro football fans in Maryland are geared up for the start of the season. The Baltimore Ravens begin their regular season Thursday. Washington's NFL Team plays its first regulation game of 2013 next Monday.  

Last week we blogged on Maryland’s close-out report for fiscal year 2013. Even though revenues fell $62 million short of estimates, the state ended its year on June 30 with $1.2 billion in the bank. We also blogged on the unprecedented levels of long-term unemployment – with 89,000 Marylanders unable to find work for 27 weeks or more last year.

Coming Up September 3-6

September 4: At 10 am in Annapolis, the Board of Public Works meets.

At 1 pm in Annapolis Maryland's judicial partners will brief the Special Commission of Security in State and Local Corrections Facilities on local court and detention center interaction; the impact of case docketing on detention centers; and security at bail and pretrial hearings

September 5: At 1 pm in Annapolis, the Maryland Health Care Reform Coordinating Council will recap the 2013 Legislative Session, and get an update on Maryland health benefit exchange activities, and the state innovations model planning grant. 

September 6: The US Bureau of Labor Statistics releases national employment and unemployment data for August.