Federal spending in Maryland - a key engine for this government-town state - rose faster in the 2006 fiscal year than it did nationwide, according to a new tally released yesterday.
Total spending, which ranges from salaries to Social Security checks to spy drones, jumped nearly 10 percent to $75 billion after accounting for inflation, according to the U.S. Census Bureau. Spending in the United States as a whole rose a more modest 4 percent.
Despite that trend, the Census Bureau said the amount funneled to contractors doing work in Maryland, an important part of the state's economy, fell for the first time since just before the 9/11 attacks. Spending on goods made by, or services performed by, contractors was $21.8 billion, a decrease of 3 percent from the 2005 fiscal year - caused entirely by a drop in reported defense contracts.
Maryland held on to its rank as the state with the second-highest amount of federal spending on contracted goods and services per person: $3,883.
Virginia, which was No. 1, added to its lead by getting a 5 percent increase in contract work in fiscal 2006, the most recent year for which the Census has gathered the federal data. (If the District of Columbia were a state, it would eclipse the competition, with $24,462 per person in federal spending on contract work.)
One economist said he suspects that Maryland's decline is a measurement error, particularly because such "procurement" spending rose nationwide. Loren B. Thompson, a defense industry analyst with the Lexington Institute, a think tank in Arlington, Va., said he sees signs of increased contractor activity everywhere he looks in Maryland, from Bethesda-based Lockheed Martin Corp. to unmanned-aircraft maker AAI Corp. in Hunt Valley.
"The overall Pentagon budget shows a steady increase in research and procurement outlays," Thompson said.
"That would not be consistent with a falloff [for] the very big defense contractors located in Maryland. ... If anything, the industrial economy in Maryland has become more dependent on defense spending in the last several years rather than less dependent."
Neither Lockheed Martin nor Northrop Grumman Corp., big defense contractors with substantial operations in Maryland, has any complaints.
"We have seen support for the areas that we're engaged in, consistent support," said Gus Gulmert, a spokesman for Northrop Grumman, which employs about 10,500 in the state.
