|
Signs
of economic downturn apparent all over county
By Liam
Farrell, Staff Writer
Capital Newspaper
June
29, 2008
Here are
two scenes that took place this week. Although separated by
miles, occupations and responsibilities, both are symbolic of
the same problem: What do you do when your money doesn't go
as far as you need it to? One is set in the crowded hearing
room of the Legislative Services Building just off State Circle,
with wood-paneled walls and microphones bent in front of stern
and powerful people. The other is in the bustling food aisles
of a Wal-Mart about 20 miles away in Glen Burnie, where a mother
hunts for bargains, her two young children sitting in a shopping
cart.
In the wood-paneled
room, Gov. Martin O'Malley, Treasurer Nancy Kopp and Comptroller
Peter Franchot are debating how to cut $75 million from an already
tight state budget. In the Wal-Mart, Christie Kramer, who lives
in Severna Park, has decided it makes more sense to shop for
food at the discount store than closer to home. Even though
gas prices are hardly ebbing, the prices at Wal-Mart - which
include $3.40 for a gallon of milk - still make the whole trip
cheaper. Of course, Ms. Kramer and her two kids, Chloe, 8, and
Sophia, 2, don't always take the car. The family purchased bikes
for trips to the pool or the movie store. The owner of a hair
salon that took an $11,000 loss last year, Ms. Kramer has had
to restructure how stylists pay for their spaces and almost
moved the business from a commercial building to her own home.
After all, how much can customers pay for bloated electricity
bills before they just stop coming? "(The economy) has been
really rough on everybody," she said. "It's insane. It really,
truly is."
Maryland
is the wealthiest state in the nation, according to a U.S. Census
report released last year. Anne Arundel ranks as its fifth-richest
county, with a median household income that jumped from $71,961
in 2005 to $79,160 in 2006. But across all spectrums of the
region, residents are adjusting their behavior to tougher economic
times. People drive less, eliminate or consolidate vacations,
buy food in bulk and stay home on the weekends. It's a time
when even a modest personal windfall - the stimulus checks being
sent out from the federal government - is just as likely to
wind up paying down a mortgage or credit card as a new television.
This past
week, reporters from The Capital fanned out to see how people
are adapting. For example, new applications for carpools formed
by the Annapolis Regional Transportation Management Association
have more than doubled over the same period last year. More
drivers also are hopping onto the Maryland Transit Administration's
commuter bus service. Last month, the bus running from Annapolis
to the New Carrollton Metro Station in Prince George's County
saw a 15 percent increase over May 2007 ridership. The bus from
Kent Island to downtown Washington, D.C., averaged 66 more passengers
in one month.
Other snapshots
of economic troubles include: The Maryland Seafood Festival
was canceled in April. A major fundraiser for the county, the
42nd annual festival was called off when the Annapolis and Anne
Arundel County Chamber of Commerce projected attendance and
revenue would have fallen by more than 20 percent. Students
at Anne Arundel Community College have begun to carpool and
are encouraged by school officials to cluster their classes
on fewer days to minimize driving. Engineering major Tarek Alam
was paying so much to fill the tank of his 2008 Toyota Sequoia
SUV - about $110 a week to drive the 18 miles from his Crofton
home to school - that he actually stopped driving. About a month
ago he picked up a 1992 Toyota Camry that costs just $35 to
fill up, and now the SUV gathers dust in his driveway. Summer
camps are holding strong at the Bay Theatre Company in Annapolis,
but it is having problems attracting actors and teachers. Bay
is a professional company, and some performers in the past have
traveled a long way to take the stage, said Lucinda Merry-Browne,
one of the founders. The Gold's Gym on West Street has seen
a spike in cancellations, although Jeff Dibler, the operations
manager, said it's hard to tell how much the economy has influenced
the situation. More customers have started to pay month-to-month
rather than shelling out lump sums, he said, and the gym is
offering 25 percent off memberships to attract "people who are
watching their wallets." Construction workers are buying motorcycles
to commute, leaving their big trucks and equipment on site to
save gas money, said Michael Patrick, the sales manager at Harley-Davidson
of Annapolis. There has been a 20 percent increase in new riders
over the past year, Mr. Patrick said. The expanding client base
includes lawyers, doctors and an attorney for a Supreme Court
justice.
Robert Stewart,
a rising senior at St. John's College from near Greenville,
N.C., is feeling the pinch and barely making rent even though
he works at the Mitchell Gallery on campus and at the Hammond-Harwood
House. College students are having a harder time finding summer
jobs this year. "A lot of restaurants aren't doing the business
they were, so there's not even dishwashing jobs available,"
he said. So far, crabs are selling well for Fred Baxter at Mr.
B's Seafood in Stevensville. This weekend, large crabs are selling
for $235 per bushel and medium crabs for $150 per bushel, but
he is keeping an eye on jittery customers. "People don't have
to buy crabs and shrimp and lobster. They have got to buy staple
foods," Mr. Baxter said. "Crabs are now a luxury food." Business
has been down 10 to 15 percent from last year at Northwoods
Restaurant in Annapolis, and owner Russell Brown is trying to
keep costs down. Mr. Brown makes sure burners and sinks get
turned off to save on utilities and has turned to Sam's Club
to buy his produce and staples like milk, butter and paper supplies.
"You have got to cut corners where you can," he said.
As the housing
market cools, George Matthews, the owner of A-1 Mortgage in
Annapolis, said he is using his "down time" by taking classes
to become a real estate broker on the side. He heard of one
broker who left the business to "sell shoes." Toyota has slowed
down its shipments of pickup trucks to the Koons Toyota Truck
Center on West Street, and the lot is offering bigger rebates
for the vehicles. Customers have been incredulous to find out
the resale value of trucks and SUVs are below expectations.
"It's all because of gas and the economy," said Koons sales
associate Glenn Church. Sluggish growth There isn't one singular
explanation for why the economy is struggling and why people
are feeling the pressure from all sides. There was the falling
housing market, corresponding with the implosion of risky mortgages,
and at the same time oil availability shrank and made everything
from the price of gas to milk increase. Meanwhile, creditors
started shirking from anything even remotely resembling risk.
Consumer
confidence fell this month to its lowest point since 1992 and
the Federal Reserve has started to worry about inflation. And
the separation between national and international markets is
eroding, said Dr. Joseph Cater, the president and chief economist
for Market-Economics in Annapolis. "All of these multiple factors
… come to influence the business on 100 Main St. as well as
the house next to 100 Main St.," he said. "Yes, it would be
a perfect storm … We are becoming aware there are a lot more
perfect storms." Can the economy get better soon? Based on Maryland's
affluent status as the richest state in the nation, a burgeoning
biotechnology sector and its proximity to the federal government,
elected officials are searching the horizon for a break in the
clouds. "We are one of the stronger state economies in the nation,
and that's why I believe we're going to come out of this downturn
more quickly than other states," Gov. Martin O'Malley said recently.
But that's
a fairly optimistic assessment, according to Mr. Cater. After
all, the state hasn't been hitting its targets for the sales
tax. "Despite relative wealth, consumers weren't spending,"
he said. "That was a targeting sign two years ago." Maryland
does have a good base with the federal government, which provides
direct jobs and contracting work, Mr. Cater said, but those
sectors won't spur the growth needed to counteract the slowdown.
Outside of defense work, most areas have, at best, stayed the
same, with research grants drying up. The economy is going to
be "very slow going," he said. "You begin to see people are
changing," Mr. Cater said. "Instead of buying a steak, I'll
buy a hamburger." Staff Writers Earl Kelly, Theresa Winslow,
Elisabeth Hulette, Pamela Wood, Tim Ebner, Erin Cox, Shantee
Woodards, Katie Arcieri, E.B. Furgurson III, Bill Brink, Ryan
Fox and Scott Daugherty contributed to this report.
Published
June 29, 2008, The Capital, Annapolis, Md. Copyright © 2008
The Capital, Annapolis, Md.
|
