County to interpret economy

May 17, 1994|By James M. Coram | James M. Coram,Sun Staff Writer

County officials and business leaders -- still smarting from the recession -- unveiled yesterday an early-warning system based on local economic indicators.

The plan calls for government officials and business people to meet four times a year to draw conclusions about the local economy from data on employment, income, sales taxes, building permits and real estate sales.

The group also will examine leading economic indicators for the nation and the region.

"It beats a stab in the dark," County Executive Charles I. Ecker said yesterday morning, after he announced the system.

He said the system will help officials "make educated guesses, estimates" about the short-range future of Howard County's economy. "We still may be wrong, but this is an important tool."

The county is the third jurisdiction in the Washington-Baltimore area to select local indicators and publish the raw data, officials said. Montgomery County and Prince William County, Va., are the others.

But Howard County becomes the first jurisdiction in the area to appoint a group of evaluators to interpret local indicators and issue reports, County Budget Administrator Raymond S. Wacks said.

"Economic forecasting is more art than science," said Mr. Wacks, who uses economic forecasts to put together the county's budget. Even so, he added, "The more information you have, the better the job you do."

During the recent recession, Mr. Wacks provided Mr. Ecker a different and more accurate set of estimates than the state projections. Mr. Wacks' office will be responsible for putting together the new information, which is to be analyzed and distributed on a quarterly basis.

But Mr. Wacks warned that economic forecasting remains an uncertain task. He noted, for example, that the drop in local income tax revenue in 1990 "happened faster than anyone would have projected. . . . Even with these indicators, we wouldn't have been able to predict it."

The idea for the economic early-warning system came from a local lobbying group, Economic Forum.

The forum -- made up of representatives of the real estate industry, farming interests, educational groups, the National Association for the Advancement of Colored People and businesses -- was formed in 1988 "to promote the preservation of the quality of life and intelligent economic growth in Howard County."

The group defines its lobbying role as one of advocating housing and educational and economic opportunities for county residents.

One of the reasons for suggesting that a group study local economic indicators, rather than national data alone, is that Howard County doesn't mirror the national economy, forum president James R. Schulte said. For example, the national economy improved before the local economy, he said.

In September, forum members Peggy Gallagher, George Martin and Gaetan "Guy" Caiazzo began work on selecting five local indicators, in conjunction with Mr. Wacks and Julie Mason, an intern assigned to the budget office.

Yesterday, the group released a 30-page booklet called "Economic Indicators -- Baseline Report" that will become the basis for future summaries.

In addition to Mr. Wacks, government representatives for the group of evaluators likely will include Joseph W. Rutter Jr., county director of planning and zoning; Raymond F. Servary Jr., county director of finance; and Richard W. Story, executive director of the Economic Development Authority.

Mr. Schulte will nominate forum representatives to the group, subject to Mr. Ecker's approval.

"In the past, we have been reactive," Mr. Ecker said. "This will enable us to become proactive -- to make adjustments before [an upturn or a downturn in the economy] happens."

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