Economic Downturn Slows Development, Business Expansion

#4 News Story

December 30, 1990|By Darren M. Allen | Darren M. Allen,Staff writer

After nearly eight years of record growth, Carroll County -- as well as the rest of the Baltimore region -- suffered an abrupt economic downturn in the second half of 1990 that slowed construction, industrial development and business expansion.

The slowdown in new home construction -- which really began at the end of last year -- was especially significant in a county that for years could count on a steady stream of thousands of new residents, new public services, new businesses and new sources of revenue.

From 1980 to 1989, almost 11,900 home-building permits were issued in Carroll County, an average of about 1,300 a year. Through the third quarter of 1990, only about 990 had been issued, and, county officials say, that is misleadingly high because of the rush of permits applied for in September.

In September, the County Commissioners ended months of speculation on the county's impact fees by deciding not to raise them.

Applications for permits since then, county records show, are about 80 percent lower than during the same period in 1989.

The slowdown in housing has had a ripple effect throughout the county's economy, especially in county and municipal budgets.

Last month, the county government revealed that it was facing a budget deficit of at least $2.5 million, due in part to lower-than-expected revenues and higher energy costs. To combat the hole in the $116 million budget, the County Commissioners curtailed travel, turned down thermostats, instituted a hiring freeze and decided to close county buildings on Christmas Eve and New Year's Eve.

Town governments also began to pinch pennies, as the possibility of lower property tax revenues and reduced county and state aid became reality, though many of them -- especially Mount Airy, Manchester, Hampstead and Taneytown -- continued to plan for growth.

In fact, some town leaders viewed the slowdown as a blessing.

"We've been anticipating all kinds of growth," said Taneytown City Manager Neal W. Powell. "But I'd like to see everything slow down for a little while."

The slowdown probably means that the county's rapid growth in population -- up 143 percent from 52,785 in 1960 to 128,000 in 1990 -- will level off in 1990.

The rapidly rising cost for the average home in Carroll -- up 200 percent from $43,000 in 1970 to $130,000 in 1990 -- will probably also slow.

But that slowdown also means that some of the unstoppable projects already in place to accommodate growth, such as Manchester's $11 million sewage treatment plant expansion, could end up costing more money -- money that won't come with lower housing prices and fewer new residents.

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