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Economic indicators send mixed signals

Maryland’s revenue is, once again, coming in lower than first expected and unemployment is, once again, higher than it was before.

Still, state officials see cause for optimism in the otherwise gloomy figures.

The state is expected to write down $66 million in revenue shortfalls over the rest of fiscal year 2010, which ends June 30. State revenue analysts have not yet predicted any writedowns in 2011.

The letter to the governor from the state’s Board of Estimates reads, in part: “Despite the fact that the aggregate revision is relatively modest, the general fund outlook remains poor, with a decline of 5.2 percent in fiscal year 2010, the largest decline on record.”

It continues: “The recession may be over, and Maryland’s economy has not contracted as much as the national economy, but the effects of the recession will linger.”

According to the Associated Press, Gov. Martin O’Malley said the forecast indicates “a leveling off, and that’s the precursor to true recovery.”

The board reported Wednesday afternoon the state expects $12.2 billion in receipts in fiscal 2010, and a modest increase to $12.6 billion in fiscal 2011.

Indeed, the revenue estimates, while still negative, are more encouraging than those that came even six months ago, when O’Malley took more than $1 billion in budget actions, including cuts, through the Board of Public Works in the first half of this fiscal year.

Unemployment in Maryland, meanwhile, hit 7.5 percent in January, up a touch from the 7.4 percent figure in December.

The local government, health care and financial services sectors shed 2,500 jobs in January, according to the Department of Labor, Licensing and Regulation.

Some industries particularly hard hit by the recession, like construction and retail, added jobs during the month.

“While it is not across the board, we are seeing some signs of improvement in Maryland’s employment market,” labor Secretary Alexander M. Sanchez said in written statement.

As O’Malley has been scrounging through the state’s fiscal couch cushions this legislative session to find ways to keep the budget balanced heading into next year, he has also taken aim at the state’s unemployment problem.

There’s a job tax credit in the bill that, in its final form, will likely offer businesses $5,000 refundable tax credits for each unemployed Marylander they hire. The governor has also pushed for an aggressive list of capital project to lower the unemployment rate among construction workers. The rate rose as high as 18 percent during the recession.