Lower classes struggle in boom

Middle- and low-income Marylanders struggled even during the state’s strong economic growth in recent years, and their situations are likely to worsen in the coming months, according to a recent study.

“The economy, as everyone knows, has deteriorated seriously,” said Neil Bergsman, director of the Maryland Budget and Tax Policy Institute, which with the Progressive Maryland Education Fund produced the report.

The findings are “sobering,” but next year’s will be even more shocking, said the group’s director, Sean Dobson.

The report, which covered from 2001 through 2007, found great disparity among economic classes.

Maryland’s median household income has increased to $68,080, which is the highest in the country. The increase was “driven mostly by income growth among the affluent and upper-middle-class Marylanders,” the report states. While income among the wealthy increased, the report shows the working class faced rising unemployment, poverty rates and health care costs.

Some Marylanders gained in income, but the number of unemployed has significantly increased this year, reaching 131,000 in July, the largest it has been in more than 10 years.

Mr. Dobson said the unemployment rate has increased “relative to where it started from, but the overall rate isn’t that high.” Compared with the national unemployment rate in July 2008 of 5.7 percent, Maryland’s rate of 4.4 percent is still low, he said.

Christine Hansen, a spokeswoman for the Gov. Martin O’Malley, a Democrat, said Maryland is bound to have economic problems because the entire country is facing similar circumstances.

Poverty has been a consistent problem for Marylanders in recent years. The state’s economy has grown by 18.6 percent since 2001, but the 2007 poverty rate of 8.3 percent is essentially unchanged from the years before, according to the report.

“We are taking steps to move that number lower,” said Andy Moser, the assistant secretary for the Department of Labor, Licensing and Regulation.

Mr. Moser thinks help might come from a bill passed last year in the General Assembly that will better connect adult education to the labor force.

The report also found the state’s infant-mortality rate and total mortality rate are higher than the national average, a trend owing in large part to an increasing number of uninsured Marylanders.

Finding money for projects to help low-income residents could be difficult with the state’s estimated $432 million revenue shortfall. The study stated more stringent tax enforcement and elimination of tax breaks for the wealthy is the first step toward more revenue.

In response, the state comptroller’s office said it has made a strong effort to close corporate tax loopholes.

Comptroller Peter Franchot, a Democrat, “has made a priority of targeting tax compliance,” said agency spokesman Joe Shapiro. “We’ve also added auditors to our compliance division to ensure that corporations and individuals are paying a fair share.”

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