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Survey finds gap in spending power

September 05, 2000

Survey finds gap in spending power



By LAURA ERNDE / Staff Writer


The typical household in Hagerstown has about half as much spending money as a family living just 25 miles away in Frederick County, Md.

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Buying power varies widely depending on where you live in the Tri-State area, according to the latest survey by Sales and Marketing Management Magazine.

The survey shows that the average Frederick County household has $48,446 to spend after paying taxes.

Hagerstown's spending power is $25,429 and Washington County's is $32,590, the survey found.

"That's not news that we need to work on buying power," said Suzanne Hayes, chairwoman of the Hagerstown-Washington County Chamber of Commerce.

Increasing wages has been a longtime goal of the chamber and the county Economic Development Commission.

Hayes said there's no easy explanation for the discrepancy, but perhaps it's related to the fact Hagerstown has become a hub for the Tri-State's retail and hospitality industries, creating a glut of low-paying jobs.

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"I think we're going to have to dig under that one," she said.

It's easier to see trends in those counties that are doing well.

Frederick County, Md., and Jefferson County, W.Va., the two area counties with the highest disposable incomes, have two things in common - their populations are growing fast and many of the new residents commute to jobs in the Washington, D.C., and Baltimore metropolitan areas.

More than 80 percent of the people who moved to Frederick County between 1980 and 1995 were from other Maryland counties, illustrating the movement away from city population centers, according to the Frederick County Planning Office.

Both counties have a high proportion of commuters.

Recent numbers won't be available until the 2000 Census is tabulated, but in 1990 roughly half of the people there left their home county to go to work. Local observers said they believe that trend has increased since then.

Some newcomers first discovered Jefferson County on weekend trips whitewater rafting, sightseeing at Harpers Ferry National Historical Park or shopping at the Mountain Heritage Arts and Crafts Festival, said Mary Via, executive director of the Jefferson County Chamber of Commerce.

One of the pioneers was a former U.S. Senate postmaster, who became Via's neighbor in the 1970s after spending his weekends antique shopping there, she said.

Jefferson and Frederick counties, positioned on the eastern edge of the Tri-State area, will always draw commuters simply because of their proximity to the city and MARC train access, officials said.

Knowing that forces local employers to increase salaries in order to compete, Via said.

What's not known is why commuters seem to be bypassing Washington County, Hayes said.

L. Michael Ross, president of the Franklin County (Pa.) Development Corp., believes many of the newcomers are seeking lower taxes.

But even he admits there may be more perception than reality to the notion that taxes drop when you cross the Mason-Dixon line. It's difficult to say for sure because each state has a vastly different tax structure.

There is clearly an advantage for retirees, who aren't taxed on their income in Pennsylvania, he said.

That's why places like Penn National, an upscale retirement community outside Mont Alto, Pa., are doing so well, he said.

Even in retirement, those newcomers are bringing with them sizeable incomes that help give Franklin County the third-largest disposable income in the area at $37,332, he said.

There are downsides to growth and commuting, Hayes said.

Growth is difficult to control and puts a strain on public services such as schools and roads. And commuters have to make family sacrifices for their larger paychecks.

Via said her son-in-law, who has been commuting for 12 years, is a perfect example of the tradeoffs commuters make.

"He pays a pretty high price in the time he has to spend away from his family," she said. "It's kind of an unending circle. When they have more income, they might not always have more time."

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