The Silver Spring Penguin

ROCKVILLE — Here’s the good news: Montgomery County’s unemployment rate is relatively low at 3.4 percent. The not-so-good news: No one actually works in Montgomery County.

Instead, much of the county’s workforce schleps it daily to places like The District and northern Virginia, a panel of experts told the county council’s economic-development committee Thursday. And having a county full of commuters can have its economic pitfalls, the experts argued.

“We have to have the jobs here, so that we have the money to support education and all the other things that make our quality of life what it is,” Gigi Godwin, with the county’s chamber of commerce, told committee members.

In the last year, private-industry payrolls in Montgomery County lopped off 1,300 jobs. And don’t expect any job growth this year either, even with the county’s 2,000 new federal jobs, David Platt, chief economist with the county’s department of finance, said.

Why are jobs leaving the county? A couple of different reasons, the experts said.

First, peg it on the region’s housing recession. Overall, the region has seen a 27 percent decline in home sales, which has quashed job growth in the construction and service industries, according to John McClain, with George Mason University’s school of public policy.

Second, despite fierce competition for talent, workers from other parts of the country are actively discouraged from relocating to Montgomery County, the chamber of commerce’s Godwin testified. Pin that on the county and state’s complicated tax structure, she said.

Third (and here’s the real rub), startup companies nurtured by the county’s business incubators are being acquired — and relocated — by northern Virginia firms, Godwin added. When that action goes down, the jobs must be backfilled, she argued.

Meanwhile, the county’s department of economic development hustles to attract new companies to the county, said Pradeep Ganguly, the department’s top guy. “When the economy is down, that is the time to be aggressive with the way we market ourselves,” Ganguly told committee members.

Biotech companies from South Korea, India and Israel already call MoCo home, and a new business incubator has sprouted on Montgomery College’s Germantown campus. Another incubator in Wheaton has a waiting list full of small startups, he added. There’s also a computer-tech incubator on Georgia Avenue in South Silver Spring.

But Manuel Hidalgo, executive director of the Latino Economic Development Corp, warned against doling out financial aid. His organization, which offers micro-loans to area small businesses, recently rejected 10 percent of applicants because the businesses couldn’t handle any more debt, he told the committee.

“We’d be giving them the rope to hang themselves,” he said.

So what’s a county to do? Hidalgo called for a sales-tax holiday and lower taxes on booze to stimulate consumer spending. Other panelists recommended lower taxes and looser regs to kick start the construction industry.

“I’m willing to look at discrete steps to make adjustments,” council member Roger Berliner (D-District 1) told the panel.

But at-large Dem Marc Elrich wasn’t digging it. “Those fees are there to provide infrastructure,” he told his colleagues. Without that revenue stream, residents can expect less infrastructure and higher taxes, he warned.

George Leventhal (D-At large) tossed his hands in the air. “If development is barely occurring, then the conversation is moot,” he said.

Photo courtesy of Flickr user Steve Longus.