Posts Tagged ‘Washington’

Loudoun is the Nation’s Wealthiest County

Wednesday, May 2nd, 2012

Ten of the 15 richest counties in the United States are located in Washington, D.C.’s Virginia and Maryland suburbs. According to 2010 Census Bureau data, with three counties exceeding the $100,000 mark, life seems pretty good in these areas, even as the U.S. median household income declined 2.3 percent between 2009 to 2010.  Even so, the richest counties boast a median income that is about double the national average of $49,445.  Only one county west of the Mississippi River – Douglas County in Colorado – made the list.  The other counties are in the New York and New Jersey suburbs.

Loudoun County, VA, with a median household income of $119,540, takes first place. With a median household income that is $16,000 higher than second-place Fairfax County, VA, Loudoun has trounced the competition on its way to becoming the richest county in America.  Loudoun borders both West Virginia and Maryland and is the site of Washington Dulles International Airport.  The Appalachian Trail runs along its western border, and the area was principally agricultural until the airport was built in the 1960s.  The population has continued to increase since then, with the area nearly doubling between 2000 to 2010. The poverty level is just 3.2 percent.

As of the 2010 Census, Loudoun County is estimated to be home to 312,311 people, an 84 percent increase over the 2000 figure of 169,599.  That increase makes Loudoun the fourth fastest-growing county in the United States.  Loudoun County is home to world headquarters for several high tech companies, including Verizon Business, Telos Corporation, Orbital Sciences Corporation, and Paxfire.  Like Fairfax County’s Dulles Corridor, Loudoun has economically benefited from the existence of the airport, which is mostly located in the county.  Western Loudoun County retains a strong rural economy and the equine industry has an estimated revenues of $78 million.

Second place Fairfax County, VA, is one of the largest counties in terms of population (1,081,726 residents in 2010), but it is also notable for its high-priced real estate.  Fairfax is one of only two counties to break the half-million mark in home values, with the median value of $507,800 for an owner-occupied home.

In descending order, the next richest counties in the Washington, D.C., area are Howard County, MD, with $101,771; Arlington County, VA, with $94,986; Stafford County, VA, with $94,317; Prince William County, VA, with $92,655; Montgomery County, MD, with $89,155; Calvert County, MD, with $88,862; St. Mary’s County, MD, with $88,444; and Charles County, MD, with $87,007.

Eugene Lauer, Charles County’s Economic Development Director, said he is not surprised that southern Maryland counties made the list.  “I think it’s great.  A lot of people may not know this, but we have ranked fairly high for a number of years,” he said.  “We know we have an affluent, highly-educated, qualified workforce in Charles County, and we have excellent students who will be in the workforce of tomorrow,” according to Charles County Commissioner Candace Quinn Kelly.  Lauer said Charles County’s low unemployment rate also helps drive up its ranking.  “Our unemployment rate is 5.4 percent.  That’s fourth or fifth best in the state, better than Maryland as a whole, which is 6.7 percent, and the U.S., which is 8.5 percent,” he said.

Dean Frutiger of the Council for Community and Economic Research though has a serious caveat.  “To rank something based on simply income does not take into account real cost of living issues,” said Frutiger, who calculates the nationwide Cost of Living Index.  After you factor in the local costs for items like housing, utilities, groceries, and transportation – D.C. metro area incomes go down by about 43 percent.  According to Frutiger “That $119,000 a year median income in Loudoun County, reduced by the cost of living index, means you’re down to $83,000.”

Bill Gates, Sr.: The Rich Must Pay More Taxes

Monday, December 19th, 2011

Bill Gates, Sr., a retired attorney in Washington state, supports a ballot initiative that would require the state’s highest earners — including himself and his son — to pay an income tax.  Currently, the state does not collect personal income taxes.

The father of billionaire Microsoft founder Bill Gates, Jr., believes that the poor pay too much tax, and that the rich don’t pay enough.  Washington’s school system, which is a catalyst for future economic growth in the high-tech state, suffers from too little funding because the wealthy aren’t paying their fair share, according to Gates.  His 1098 initiative — an income tax on adjusted earnings that exceed $400,000 a year per couple or $200,000 for an individual — is drawing protest from Washington business leaders, as well as anti-tax groups.

Initiative 1098 would give tax credits to approximately 80 percent of Washington-based businesses and slash the state share of property taxes by 20 percent for businesses and homeowners.  According to critics, the legislation would harm the economy by taxing the earnings of people who own the businesses — money that would be used to put people back to work.  The opposition’s Defeat 1098 campaign believes that an income tax on 38,400 of the state’s highest earners would take away vital competitive advantages and drive away entrepreneurs.  Even Governor Chris Gregoire’s Commerce Department has publicized Washington’s lack of an income tax in statements about the state’s business climate.

Gates considers Washington state’s tax system to be “dramatically regressive”, something that was proved in 2002 when he led a commission created by the Legislature to study the state tax system.  The commission recommended replacing the sales tax or property tax with an income tax that would rebalance the load.  Gates cited data gathered by the national Institute on Taxation and Economic Policy that show Washington’s poorest 20 percent pay 17 percent of their income in sales, property and other taxes.  By contrast, the wealthiest one percent pays less than four percent.

The initiative would impose a state income tax on individuals earning more than $200,000 and couples earning upwards of $400,000.  In other words, single people would pay a five percent tax on income over $200,000 and nine percent tax if they earn more than $500,000.  Couples would pay five percent over $400,000 and nine percent if they earn a combined income that exceeds $1 million.

“It’s not a matter of picking on someone,” Gates said.  “It’s a matter of correcting to some extent a bad historic situation and arguing — I think absolutely persuasively — that this is a proper source for a serious financial shortfall in our operations, namely the public education system.”

Gates’ proposal also has met opposition from Steve Ballmer, Microsoft CEO, and Jeff Bezos, President of Amazon.com, both of whom donated $100,000 to anti-tax groups.

Another voice of opposition is Stephen Moore, who wrote in the Wall Street Journal, “I wish I had a dollar for every time a wealthy liberal has declared he thinks he should pay more taxes. That list includes Warren Buffett, George Soros, Bill Gates Sr., Mark Zuckerberg and even Barack Obama, who now says that not only should rich people like him pay more taxes, they want to pay more.”

Gates is joined by Berkshire-Hathaway CEO Warren Buffett in calling for higher taxes on the wealthy.  President Obama supports “the Buffett Rule”, a guiding principle to ensure that the rich pay as large a percentage of their income as the middle class.  Some millionaires insist that Buffett doesn’t speak for them.  “There is more of a difference between my financial position as a multi-millionaire and Buffett’s than there is between mine and a guy that makes minimum wage,” one CNN Money reader said.  “Why am I grouped with him and why does he feel he can speak for me?”

Just 24 percent of millionaires said higher taxes on large incomes is the optimal solution, according to a survey from Spectrem Group, a research firm specializing in the finances of affluent Americans.  The largest group of millionaires, 44 percent, believe that a flat-rate tax across all income brackets is the fairest system.

The Self-Fulfilling Prophecy?

Monday, September 26th, 2011

Mark Zandi of Moody’s Analytics, who often discusses the economy, recently said something disturbing and fascinating about the possibility of a double-dip recession.  According to Zandi, it could be the only recession that we will ourselves into.   Zandi was talking about gloomy expectations that make people so nervous that in terms of economics, they freeze.  His remarks are a reminder that while we regularly report economic data – unemployment, cost of living, home prices, trade deficits – there are other measures of our economy that are, by definition, subjective.  Do we feel secure?  Do we have confidence in the future to the point where we’re willing to spend money and take risks?

According to Dennis Jacobe of the Gallup Organization, “We’re a lot less confident than we normally are. Three out of four right now will say the economy is getting worse.  And that’s a number that approximates the numbers of late 2008.  I think the American people don’t see the economy that most of us economists and the public policymakers see.  Americans see high unemployment rates and are concerned about losing their job.  They’re concerned about higher food prices and higher energy prices, even though we say that there’s not much inflation.  They’re worried about the housing market.  And then on top of that, they’re worried about things like politics and the confrontational kind of stalemate in D.C. 

“That certainly had an impact according to our numbers,” according to Jacobe.  And what we see happening over the last several weeks is interesting in the sense that the average American, middle and lower income American, has been fairly pessimistic for quite a while with all these things that have been bothering them.  But what we’ve seen happen recently is that things like the confrontation over the debt ceiling bill and on other kinds of things seem to have troubled upper-income Americans.  Now, they’re also affected by what’s happening on Wall Street and what’s happening internationally with the problems in Europe and those kind of things, but when upper-income people also get very pessimistic, that’s when our numbers get up to three-quarters or 80 percent of Americans being worried. 

“There really isn’t.  And, you know, I think that one of the things that’s happening is that we’re not paying enough attention to consumer psychology as opposed to Wall Street and investor psychology.  People all the time talk about how that affects Wall Street and how when Europe has had financial problems, they thought – people thought back to 2008 and the financial crisis and all those kind of things.  But the average American is affected by the same kind of thing.  They saw tremendous financial shock in 2008 and early 2009.  And they saw that in their lives and in terms of not only credit access, but also in terms of their jobs and their job security.  And I think people forget that when a lot of these things happen, like the budget confrontation, that that brings back memories of those days and those troubles.  And that has a major impact on consumer psychology.  So the statement like Zandi made makes a lot of sense in the sense that consumers actually are impacted today differently than, say, in years past,” Jacobe said.

“The trouble is people are so shell-shocked and haven’t really gotten over the recession,” according to Zandi.  “They’re extraordinarily nervous, and when anything goes off script even a little bit they freeze, and that’s where we are right now and why we are so close to recession.”

In discussing the recent Standard & Poor’s downgrade of the United States’ credit rating from AAA to AA+, Zandi believes that there is a logical apprehension that a financial market selloff could feed on itself, doing real economic damage if it drags on.  Wary households might respond by cutting back on spending, and anxious businesses would be even more cautious about investing and hiring.  This could cause a double-dip recession, which would only intensify the nation’s fiscal troubles.  Federal Reserve policymakers are certain to take this into account.  S&P might even downgrade other nations’ sovereign debt, since the U.S. government provides vital support to the entire global financial system. This could increase borrowing costs for homebuyers seeking mortgages and businesses that want to expand.  The impact on lending rates would be small, a few basis points at most.  Financial markets should be able to weather the S&P downgrade, with little lasting economic impact.  “Fundamentally the United States does not deserve a downgrade, because policymakers have made significant strides toward fiscal responsibility.  The debt-ceiling deal was a vital step that doesn’t solve the nation’s problems, but it goes more than halfway,” Zandi said.

One idea that Zandi has to stimulate the economy is to take back unspent dollars from the American Recovery and Reinvestment Act (ARRA) and spend it on projects or on short-term stimuli like food stamps.  This is easier said than done and might create more problems than it fixes.  “It’s meaningful, but it’s not a game-changer,” Zandi said.  “From an economic and political perspective, I’m not sure that would make a lot of sense to do.  A lot of this spending has generated a lot of planning, a lot of environmental designs.  They’re counting on the money. If you’re going to divert it, you’re going to create all kinds of problems for them.”

There’s A Whole Lot of Shaking Going On

Tuesday, September 6th, 2011

A big shake-up occurred recently in Washington, D.C.,  although it was not of the variety that some would prefer.  The nation’s capital was taken by surprise when it was hit by a 5.9-intensity earthquake that rocked the East Coast and was felt as far away as Boston, North Carolina and even Michigan.  Although early reports said that the Washington Monument was tilting slightly, it was later determined that the stately obelisk only had damage to some of the stone in the pyramid that tops the monument.  Approximately 45 minutes after the 1:51 p.m. quake, Fox News started reporting that it had received reports that the Washington Monument was leaning.  Atlanticwire noted that Twitter “immediately seized on it” and quoted Twitterer Patrick Tansey, as tweeting that “I just walked past the Washington Monument, it’s not tilted at all.” 

The Associated Press reported that “The National Park Service (NPS) says all memorials and monuments on the National Mall were evacuated and closed after an earthquake struck near the nation’s capital.  No damage was reported.”  Park Service spokesman Jeffrey Olson said there was “absolutely no damage” to the Lincoln Memorial or other memorials along the Mall.  According to the NPS, a preliminary inspection shows the Washington Monument to be structurally sound.  But it “is evaluating the structures to ensure that they are structurally sound and safe for all visitors.  The Washington Monument, because of its structural complexities, will remain closed until further notice.  It is possible that the Lincoln Memorial and Jefferson Memorial could open as early as this evening after preliminary inspection.  The Old Post Office Tower will open on Wednesday morning.” 

One Washington landmark was damaged in the quake.  Washington National Cathedral, an impressive Gothic structure favored by tourists, suffered what is being termed as “significant” damage.  “The building will retain structural integrity,  but the damage to the central tower is quite significant,” Cathedral spokesman Richard Weinberg said, noting that engineers and stonemasons are assessing the full extent of the damage, how costly the repairs will be and when the cathedral might reopen. 

The quake was shallow, occurring three miles below the earth’s surface.  Washington Metro and commuter rail services ran normally the next morning, but authorities closed several government buildings pending damage inspections.  These include the Departments of Agriculture, Homeland Security and Interior.  The Labor Department and Health and Human Services buildings were closed at first but later reopened.  D.C. public schools were closed, in addition to schools in several districts in Virginia and Maryland.

Not surprisingly, there were some initial fears that terrorists had struck the region as office workers were evacuated from their buildings.  “In Washington, 10 years later, every day is September 12,” Marc Fisher.  “When the office ceiling shifts to and fro, and the pens and cups fall off the desk, it’s scary enough. But in a terror-scarred city, thoughts go immediately to evil attack rather than natural disaster.”  Or, as the Los Angeles Times says, “when a building shakes in Washington, ‘earthquake’ does not spring to mind.  Instead, as the magnitude 5.9 earthquake shook the capital on Tuesday, it sparked immediate fears of a terrorist attack for congressional staff members accustomed to repeated warnings about man-made threats.” 

“At first we weren’t sure exactly what it was, but as we heard the Capitol Police officers and other staff shouting evacuation orders, we knew it was serious,” said congressional staffer Rachel Semmel, who fled without her keys or wallet.  “For a brief moment during evacuation, it was very scary.” 

Senate Sergeant at Arms Terrance Gainer said that some buildings in the Capitol complex sustained structural damage and “a couple minor twisted ankles.  Aside from people being a little bit anxious and nervous,” most Capitol complex employees are fine, Gainer said. 

To watch the White House shake during the earthquake, click here.

Gridlocked Chicago: There’s Some Disagreement

Tuesday, February 1st, 2011

Gridlocked Chicago:  There’s Some DisagreementChicago is # 1!  Unfortunately, this is not good news because the Windy City has been ranked by one study as having the worst traffic congestion in the nation.   The news was one finding of the Urban Mobility Report (UMR),  conducted by the Texas Transportation Institute, the United States’ largest university-affiliated transportation research agency.  Earlier TTI studies had ranked Chicago in second or third place.  Washington, D.C., and its suburbs currently occupy second place.

The study of 2009 driving conditions found that Chicago’s roadways have increasing gridlock, at virtually any hour of the day.  In addition to the normal time it takes to get from Point A to Point B by car, commuters in metropolitan Chicago and northwest Indiana spent 70 extra hours behind the wheel in 2009, according to the study.  Chicago’s earlier record was 64 hours of extra driving reported in 2008; 55 hours in 1999; and 18 hours in 1982.  The national average of time wasted stuck in traffic was a more manageable 34 hours.  The fact that Chicago is a nationwide shipping hub and has some of the nation’s heaviest truck traffic – plus two of the top bottleneck areas – also impacts congestion.  Additionally, Illinois has approximately 10.4 million registered vehicles, and a population of around 12.9 million, according to 2009 Census Bureau statistics

“In terms of the delay for each auto commuter, Chicago now tips the scales at No. 1, where in the last report, Los Angeles was locked in that spot,” said David Schrank, one of the report’s authors.  The average cost to each commuter is $1,738.  Nationally, traffic congestion cost $115 billion in 2009; additionally, consumers drove 4.8 billion additional hours and had to purchase an extra 3.9 billion gallons of gas.

Alter NOW finds that the report has its detractors:  Smart Growth America takes issue with some of the UMR’s findings.  “It assumes, for example, that everyone should be able to speed as rapidly down the highway during rush hour as they could in the middle of the night.  American taxpayers will never stand for being asked to turn over their wallets and their neighborhoods in order to build that kind of highway capacity“.

A June 30, 2010 study by IBM actually disputes the rankings, placing Los Angeles, New York and Houston as the U.S. cities with the worst traffic.  Topping the international list of cities notorious for congestion are Beijing, Mexico City, Johannesburg, Moscow and New Delhi.  Chicago doesn’t appear on IBM’s 20-city list.

Another mid-year 2010 study by Seattle-based INRIX, places Chicago in third place nationally.  “Between 5 and 6 p.m. Thursday is now the most-congested travel hour of the week in the Chicago area,” according to the INRIX National Traffic Scorecard.  “Last year, it was the 5-6 p.m. hour on Fridays.  The reason for the change?  It could be that more people are working part-time or ‘flex-time’, and Friday is a frequent day for flex-timers to take off or work from home,” said Chicago traffic expert Joe Schwieterman of DePaul University.  “Chicago doesn’t have a long-term plan to do much about congestion, we’re adding some lanes to the Tri-State, some work on I-80, but there’s not the construction in the works to relieve some of the worst bottlenecks“.

Wall Street Relocating to Constitution Avenue

Friday, July 17th, 2009

America’s financial capital is now Washington, D.C. With Congress and the White House acting forcefully to stop the bleeding resulting from the worldwide financial crisis, numerous investors and brokers are relocating from New York to Washington because that’s where the action is these days.

wall-street-flagOne of the nation’s healthiest metropolitan areas, Washington is benefiting from government hiring as the Obama Administration works to strengthen the nation’s financial system.  The collapse of prominent investment banking firms such as Lehman Brothers and Bear Stearns has triggered increased scrutiny of large banks and created a need for additional workers with auditing and investment expertise in government regulatory offices.

The government’s deep involvement in the financial sector is bringing in investment that in other times would have gone to Manhattan.  German banks, for example, are investing significant dollars in hotels and office buildings.

According to Ramon Kochavi, regional manager of Marcus and Millichap, “The government will grow.”  Kochvai foresees declining defense contracting and an expansion of biotech firms under the Obama administration.  New R & D firms are opening facilities in Rockville, MD, and along Virginia’s Dulles Corridor to support the National Institutes of Health in Bethesda, MD.  Medical services growth is also expected as access to healthcare is a national priority.

Fannie, Freddie and the American Taxpayer

Thursday, September 11th, 2008

As the United States government commits a bare minimum of $100 billion of taxpayer money to bail out Fannie Mae and Freddie Mac, the final reckoning depends on how effectively Washington runs the mortgage powerhouses.

According to the Christian Science Monitor, with the sheer magnitude of Fannie and Freddie – with $5 trillion in home loans on their combined books – the taxpayers’ burden is likely to add up to billions of dollars very quickly. 00037darling-let-s-get-deeply-into-debt-postersThe worst-case scenario could see the tab rise as high as the $125 billion it cost the taxpayers in the early 1990s to bail out failed savings-and-loan institutions. The rosiest scenarios hypothesize that the short-term cash infusion might be recouped with little or no net cost to the taxpayers.

Part of the reason that Fannie and Freddie are under conservatorship is that foreign central banks and investors have been divesting themselves of American mortgage debt, because they are nervous about falling prices, weak credit and the weak dollar. Since foreign ownership represents $1.4 trillion, it is a sizable piece of the puzzle.

The bottom line is that every U.S. taxpayer is now tied directly to the troubled housing market. And the stakes here are significantly higher than the government’s $30 billion bailout of Bear Stearns. The ultimate cost to taxpayers is tied directly to the depth of the housing slump. If housing prices continue to fall and foreclosures rise, the losses to Fannie and Freddie will increase. The opposite scenario would be far better news for taxpayers.

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs), because Congress chartered them to create a stable mortgage market. They have functioned well by guaranteeing home loans or buying them outright. Even with steep declines in the number of sales and prices, investors have continued to fund home loans with a Fannie or Freddie seal of approval; this has kept mortgages relatively available and affordable.

The Treasury Department had no alternative but to intervene, become an equity investor in Fannie and Freddie, and a buyer of their mortgage-backed bonds. Their objective is to restore consumer confidence in the credit markets, reduce the cost of mortgages, and help the housing market recover.