WASHINGTON – Federal spending grew in almost all of the state’s jurisdictions between 2002 and 2003, driven by an increase in procurement contracts to the private sector, the Census Bureau reported this month.
The bureau’s Consolidated Federal Funds Report — which tracks everything from federal salaries and retirement payments to commodity loans and community block grants — said 18 counties and Baltimore City saw overall spending increases last year.
That included a 50 percent jump overall in Frederick County, where federal spending went from $1.2 billion to $1.8 billion, and a $1.3 billion increase in Montgomery County alone, whose 2003 receipt of $13.3 billion was again the highest in the state.
Garrett County saw the largest percentage jump in procurement, with contract spending soaring from $2.5 million to $13 million in one year — a whopping 412 percent increase.
It was an extreme example of the growth in procurement spending last year: While overall federal spending in Maryland grew 6.8 percent, to more than $57.6 billion, awards to contractors grew 20 percent during the same period, rising from $13.5 billion to $16.2 billion.
Contractors pointed to Maryland’s location as a huge factor in their success in attracting more federal contracts.
“When you look at the (Washington) D.C. region in general, federal spending has been considered a major boon,” said Tom Greer, spokesman for Bethesda-based Lockheed Martin.
“The federal dollars are definitely a major contributor to Lockheed Martin’s growth, as the federal government is our No. 1 customer,” he said.
Proximity to government facilities was cited by St. Mary’s County officials as the reason for a federal funding increase that boosted per capita spending in the county — which was already the highest in the state — from $18,000 in 2002 to $23,522 in 2003.
Much of the boom “points to the continued importance” of the Patuxent River Naval Air Station and its roughly 19,000 employees, said Karen Everett, the county’s business development manager.
“One of our greatest assets is our proximity to the Chesapeake test range,” Everett said. “Many contractors want to be close to an organization that is responsible for $22 billion of contract dollars.”
But defense contractors are not the only ones experiencing a boom. In fact, most of the state’s procurement awards in 2003 came from non-defense agencies.
The bulk of the increase in Garrett County, for example, went to a General Services Administration contract with Garrett Container Systems, said Frank Shap, the county’s technology development officer.
In Baltimore, Johns Hopkins University claimed it received the highest amount of federal funding of any major university in the country. Spokesman Dennis O’Shea said that while some of Hopkins’ work is defense-related, a lot of it is not.
O’Shea said that federal funding for “research, development is highly important for society,” which is why the university would continue fighting for it.
“We certainly recognize that this is a difficult fiscal environment,” he said. “But we continue to make the case in Washington . . . that these investments are important.”
But not all counties saw increased spending. Federal spending dropped in Caroline, Kent, Prince George’s, Somerset and Talbot counties. Kent had the steepest drop, falling 8.5 percent, but Prince George’s had the deepest, losing almost $30 million in federal dollars between 2002 and 2003.
But it is a loss that is yet to be felt, said John Erzen, a spokesman for Prince George’s County Executive Jack Johnson. He said the county has planned wisely and, while overall funding in the county has declined, grants directly received by the local government have actually increased.
“We’ve been in pretty good shape overall . . . to my knowledge the last couple of years, we have not had to raise taxes,” said Erzen, who added that the county has a surplus available.
-30- CNS 10-15-04