Maryland's economic performance, though suffering from the recession, is still better than most of the nation and has won unusually high ratings in a "report card" survey of state economies.
Only Maryland and Connecticut received straight As in the fifth annual report by the Washington-based Corporation for Enterprise Development, a non-profit economic consulting and research firm.
The study grades economic performance, business vitality, development capacity, and state policy. Maryland is the only state to score straight As for three years in a row.
"What we see in Maryland is it continues to be one of the strongest state economies in the nation," said Mitchell Horowitz, director of the study for the consulting firm.
The state is feeling the effects of the recession in heightened joblessness and slower growth, but the situation is worse just about everywhere else, he said.
However, the state still faces some "fundamental challenges," he said.
Overall, the report noted Maryland's relatively low unemployment and poverty rates and high job quality. The February unemployment rate in Maryland was 6.5 percent, up from 6.1 percent in January.
However, the study said the state's economy shows a wide disparity between urban and rural areas.
It said new companies are forming at a fast rate here and growing, but that businesses that sell their products outside the state are performing below average.
Although Maryland "aced" all four of the study's broad categories, it received its only F in the sub-category of "governance," which includes fiscal and tax policies.
"Maryland exhibits a leading effort in every development policy category except governance -- where a lack of regulatory and economic development governance drags it down," the study said.
"A lot of Maryland's success has been its location, so close to Washington and the federal government," Horowitz said."
To continue to succeed, Maryland must build on its base of a big federal payroll and the concentration of high-technology laboratories and other research assets, he said. More needs to be done in "commercializing" the federal jobs here, making use of technology and putting forth a clear strategic vision to guide economic development, he said.
Maryland also received Cs for the sub-categories of structural diversity, financial resources, and for "business competitiveness."
Gov. William Donald Schaefer reacted before the study was officially released today, putting out a statement last night saying, "Maryland once again is the leading state in economic development."
"We cannot take our successes for granted. We must seriously examine funding levels and our continued commitment to the economic development programs and policies that have made Maryland a national leader," Schaefer said.
He also sought to blame the legislature for the F, saying his proposals to reform taxation and limit land use would have addressed concerns in this area.
Four other states besides Maryland made the "Honor Roll" of all As and Bs this year: Connecticut, Minnesota, New Jersey and Pennsylvania. Louisiana, Montana and West Virginia trailed the field with D or F grades on each of the four indexes.
Overall, the Northeastern region was declared "internationally competitive, but [with] weaknesses showing."