Maryland Seeing Net Migration Loss After Years of Gaining Residents

By BERNIE BECKER, Capital News Service

ANNAPOLIS - Maryland may have recently won the title of richest state in the country but that did not stop thousands of its residents from fleeing the state last year.

Tax records show that almost 20,000 more people moved to other parts of the country from Maryland than moved to the state in 2006, the largest net loss in a quarter-century.

That marked the third consecutive year of a net migration loss for Maryland, after four years of gains earlier this decade brought a net gain of more than 27,000 new residents to the state.

Maryland's overall population still rose by more than 26,000 people in 2006, the 36th-highest growth rate in the country. But a Capital News Service analysis of Internal Revenue Service data revealed that Maryland residents are increasingly heading to areas where jobs are more plentiful.

"It's not that Maryland's doing poorly," said Mark Goldstein, an economist with the Maryland Department of Planning. But "in relative terms, we're not doing as well. Job growth is faster in other states."

Florida and North Carolina, for example, Sun Belt locations with warmer climates and fast-growing economies, had some of the highest net gains among states of Maryland residents.

Some of those defections could be retirees heading for warmer climates, Goldstein said. But he and others believe most people are leaving for economic reasons, chasing either new jobs or cheaper real estate in surrounding states.

A state losing residents usually means "the job base is shrinking," said Peter Morici, a professor at the University of Maryland's Robert H. Smith School of Business. Morici said Maryland's high-regulation, high-tax environment could be turning off businesses and noted that rising energy prices might also prompt residents to move south.

Goldstein said economics have been behind Maryland's migration pattern the entire decade: The state's success at attracting residents earlier this decade occurred when the economy was more depressed nationwide.

"You had this severe downturn nationally," Goldstein said. "We did have a slowing too, but Maryland was doing much better" overall.

That relative strength could have occurred because Maryland is more reliant on public-sector jobs than other states. But Goldstein and others in the state caution Maryland is not recession-proof. And with some prognosticators seeing another economic slump on the horizon, there is no guarantee people will flock to Maryland if the economy slows in other parts of the country.

Maryland always "thinks it has a silver bullet" because of its reliance on the public sector, said Robert O.C. Worcester, president of Maryland Business for Responsive Government.

Morici said Maryland and Virginia are usually more protected from recessions than other states, "but that's not as true as it once was."

"And it really only applies to the counties surrounding" Washington, D.C., Morici said.

Goldstein warned that the latest public windfall—a shift of thousands of military and related jobs to Maryland under the federal government's Base Realignment and Closure process—does not necessarily mean the state will look more attractive to residents of other states if a recession does occur.

Even though Maryland avoided the economic downturn earlier this decade, it actually did much worse than the rest of the country during the economic decline of the early 1990s, he said.

BRAC and public-sector jobs might "provide a cushion," Goldstein said. "But how things turn out will be hard to say."

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