Md. Gets 'B' In Stability

Personal finance

Nonprofit Group Upgrades State From Last Time, But Finds Weaknesses

September 22, 2009|By EILEEN AMBROSE

Despite the weak economy and worker furloughs, a new report gives Maryland a "B" when it comes to the overall financial stability of its residents.

The nonprofit Corporation for Enterprise Development, which has been tracking economic data for 30 years, Monday released its Assets & Opportunity Scorecard that grades states every other year on a variety of financial factors.

"It's better than a 'C'," says Andrea Levere, the group's president, referring to Maryland's overall grade last time.

The economic nonprofit handed out "A"'s for financial stability to Hawaii, Iowa, Kansas, Massachusetts, Maine, Minnesota, New Hampshire, Vermont, Washington state and Wyoming. Meanwhile, Arizona, Arkansas, Mississippi, Louisiana and South Carolina got "F"'s.

Maryland received its highest marks in education. But the study found vulnerabilities among health insurance among financially struggling households and employment growth. And while the state has one of the highest levels of net worth, residents are burdened by consumer debt and bankruptcies.

The group assigned grades in five categories. But within each category, there are numerous rankings on indicators such as net worth, homeownership, insurance coverage and business ownership. The rankings of the 50 states and Washington, D.C., are based on data that comes largely from the federal government.

Here are some of the findings:

On financial assets and income, which looks at poverty, bankruptcy rates, credit card debt and net worth, Maryland received a "C." The state's median household net worth of $163,788 is the fifth highest in the country. (Levere says the net worth figures come from government data before the recession, so next time around the figure will likely be less.)

Even with that wealth, Marylanders have piled on the debt. The median credit card debt is $3,391, with only four other states carrying larger balances. The median installment debt - which includes car loans - reached $16,250, putting Maryland again near the bottom in 45th place. And the state ranked 28th in bankruptcies. The study recommends that the state encourage savings by matching contributions that low-income residents make to certain savings and education accounts.

Maryland got an "A" for education. The state came in third in the country for the number of residents with a four-year college degree. And its average college graduate debt was the 10th lowest at $17,243, compared with a national average of $20,098.

The one education spoiler: Maryland ranked 40th among the percentage of children in poverty and participating in Head Start, the early education program.

On the matter of businesses and jobs, Maryland scored a "B." The state ranked 7th in the country for minority-owned businesses and 13th for women-owned businesses. But Maryland was a laggard on employment growth, coming in 35th. For that reason, one of the group's suggestions is that Maryland fund organizations to provide technical assistance or loans to small entrepreneurs, Levere said.

Marylanders were more likely to be covered by an employer health plan and pay less for out-of-pocket medical costs than residents in most other states. But the state ranks 49th when it comes to health insurance coverage among financially struggling residents. The study, which gave Maryland a "C" on health care, recommends the state do more to insure low-income residents.

In the area of housing and homeownership, the state received a "C." While Maryland did better than many states on homeownership, it fared poorly on the level of high-cost mortgage loans.

The group came up with a dozen policy priorities it considers important. Maryland took action on 10 of the policies, with seven of them having significant muscle, Levere said. For example, Maryland has a state earned income tax credit for low-income workers and has a law to prevent payday lending, she said.

Report card

Financial assets and income C

Businesses and jobs B

Housing and homeownership C

Health care C

Education A

Overall grade: B:

Source: Corporation for Enterprise Development

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