Raise Rates

Howard County companies feeling the pinch of the economic downturn are slowing their plans for expansion, forcing the commercial real estate market to slow and vacancy rates to rise into double digits for the first time in two years. No one is offering sweetheart deals to get buildings leased, but local observers who five months ago felt that the 2 million square feet of office space then being planned in the county was reasonable are saying it could take longer than expected to fill the space.

In a sign of increasing strain on Maryland hospitals, the state's rate-setting panel approved temporary increases yesterday for two financially troubled institutions, Upper Chesapeake Medical Center in Bel Air and Prince George's Hospital Center in Cheverly. Also, the Maryland Hospital Association asked the Health Services Cost Review Commission for an additional statewide rate increase - above the adjustment approved just a month ago - for the fiscal year beginning in July. The commission's staff responded by calling for an added 0.4 percent, targeted to the most needy hospitals, rather than across the board.

At the end of October, Upper Chesapeake Health closed the antiquated Fallston General Hospital and opened the Upper Chesapeake Medical Center in Bel Air. The new facility, in a convenient and rapidly growing part of Harford County, immediately attracted more patients than the old Fallston facility, as hospital management had expected - about 25 percent more admissions in the new hospital's first four months. What they hadn't expected was that Upper Chesapeake would start losing money and that the more patients came, the more it would lose.

As he ponders his choices for next year's budget, Howard County Executive James N. Robey is confronted with a difficult yet tempting two-edged option: raising or eliminating the county's two-tier fire tax. Each beckons with different charms, as Robey - beset with requests that are $30 million higher than expected income - makes final budget decisions in what he has called his most difficult year in office. "I definitely don't envy Jim Robey this year. He's in a tough position," said County Councilman Christopher J. Merdon, an Ellicott City Republican.

Consumer prices fell for the first time in 14 years last month, led by a big - but temporary - drop in the cost of gasoline, the Labor Department said yesterday. But economists said that even figuring in significantly higher prices at the pump this month, the U.S. economy is showing enough signs of cooling off that the Federal Reserve won't see the need to increase interest rates anytime soon. The Consumer Price Index, the most closely watched indicator of inflation in the United States, unexpectedly dropped 0.1 percent last month, its first monthly decline since August 1986.

Saying that the city economy is strengthening, Standard & Poor's has increased Baltimore's bond rating from A to A-plus. The rating increase means the city will have to pay less interest on the bonds that are sold to raise revenue for its projects. The report is the city's second consecutive upgrade from national rating agencies. In April, Moody's Investors Inc. upgraded the city's fiscal forecast from negative to stable. For the past two years, Baltimore has been fending off potential bond rating downgrades because of projected budget deficits.

The U.S. jobless rate unexpectedly jumped to 4.1 percent in May as the nation's businesses cut 116,000 jobs - the worst showing in nine years and the best evidence yet that the American economy has eased off its breakneck pace of early this year. Stocks surged in response to the unemployment report, released yesterday by the Labor Department, with investors reasoning that signs of weakness in the still-strong economy will induce the Federal Reserve to slow - or halt - its interest-rate increases.

Three reports last week indicated the U.S. economy is continuing its strong growth despite five interest-rate boosts since June by the Federal Reserve. The Index of Leading Economic Indicators, designed to predict economic activity three to six months ahead, rose 0.1 percent in March, after a 0.3 percent drop in February. A forecast from the National Association of Purchasing Management said the manufacturing industry will continue to prosper, with companies looking for a 5.9 percent increase in revenue over last year.

The cost of catching a cab at Baltimore-Washington International Airport will rise by about 16 percent under emergency legislation unanimously approved last night by the Anne Arundel County Council. The council unanimously passed the first taxi fare increase in nine years at the airport and across the county. "I'd say it's rather overdue," said Anne M. Hatcher, the county's licensing director. The initial cost of hailing a taxi will rise by 20 cents to $1.80 ($2.30 at BWI), and the per-mile charge will also rise by 20 cents, to $1.40, making Anne Arundel's taxis among the most expensive in the region.

The cost of catching a cab at Baltimore-Washington International Airport will rise by about 16 percent under emergency legislation unanimously approved last night by the Anne Arundel County Council. The council unanimously passed the first taxi fare increase in nine years at the airport and across the county. "I'd say it's rather overdue," said Anne M. Hatcher, the county's licensing director. The initial cost of hailing a taxi will rise by 20 cents to $1.80 ($2.30 at BWI), and the per-mile charge will also rise by 20 cents, to $1.40, making Anne Arundel's taxis among the most expensive in the region.