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Economic implications of a Western Maryland split

If Scott Strzelczyk has his way, Maryland’s iconic shape — stretching from the mountains around Deep Creek Lake to the Atlantic coast and creeping alongside the nation’s capital as it hugs the Chesapeake Bay — would cease to exist.

Anirban Basu, chairman and CEO of Sage Policy Group Inc., says leisure and hospitality offerings such as Deep Creek Lake and the Rocky Gap Casino Resort at Rocky Gap State Park could be economic drivers in a hypothetical state of Western Maryland.

The Carroll County resident is spearheading the Western Maryland Initiative, which aims to create a new state from five heavily Republican counties in Maryland. The reasoning, he said, is “decades of continuous non-representation in Annapolis.”

The first problem, he said, is gerrymandering. Because of government districting, the normal election process does not allow for the citizens of Western Maryland to effect change.

Another major problem — increased tax rates and the creation of new taxes, Strzelczyk said, are “nonstop.”

At least one prominent economist can see the point. Daraius Irani, executive director of the Regional Economic Studies Institute at Towson University, said the revenue from these taxes does not always benefit the entire state. Even the sales tax accumulated in each county is not returned on a one-to-one basis.

Beyond taxes, the General Assembly’s gun control approval earlier this year, which created stringent rules for purchases, was “the last straw.”

Now, Strzelczyk is taking to the radio and the Internet, garnering support for a divorce from Maryland. He has a long way to go, but if successful, could create a state slightly more than one-tenth the current population and about a quarter of the land size.

The hypothetical 51st state

So what would the state of Western Maryland look like?

It would be similar to West Virginia or the counties of southwestern Pennsylvania, Irani said. It would be rural, with the biggest industry sectors in agriculture, mining, natural gas extraction and some light manufacturing.

It would also market its leisure and hospitality offerings aggressively, said Anirban Basu, chairman and CEO of Sage Policy Group Inc., capitalizing on attractions in downtown Hagerstown, Deep Creek Lake and the Rocky Gap Casino Resort at Rocky Gap State Park.

It would be a “haven for retirees,” — a collection of peaceful, safe communities, Basu said.

“For a part of the state that many Marylanders don’t think about very often … it’s surprisingly diverse” as an economy, he said.

The new state’s most populous cities would be Frederick (66,000), Hagerstown (41,000) and Cumberland (21,000).

Regarding economic issues, however, supporters of this movement — its Facebook page had about 3,500 likes as of Thursday — might not have examined all the data about what such a split would mean, according to economists.

While the counties would gain influence legislatively, they would lose funding from Annapolis, including an average of $1,370 in state grants per capita, as well as valuable state resources available in other parts of Maryland.

Garrett ranked fourth among the counties in 2011 for state grants, according to recent data, accounting for 33 percent of its revenue in 2011. Allegany that year received 43 percent of its revenue from these grants. Each western county received, on average, about $120 per capita more in state grants than the average county elsewhere in the state.

The new state would have some strong industries, but its weaknesses would include a higher unemployment rate, less-educated workforce, and a weaker infrastructure, Irani said.

“There’s a bit more rural poverty that you see in those general areas,” he said.

And creating a state government is no easy task. They would have to set up a capital, create a budget and figure out how to raise revenue, most likely via taxes.

By amputating itself from the rest of Maryland, those western residents would also lose out on state-run resources to the east, the Chesapeake Bay and cultural offerings in the city of Baltimore.

The new state would retain Frostburg State University, but would have to pay out-of-state tuition at colleges and universities in the University System of Maryland, including University of Maryland, College Park, Towson University and Salisbury University, among others.

“I think they would miss us,” said Del, Bill Frick, D-Montgomery. “They would lose access to a whole host of infrastructure.”

An unlikely divorce

A successful secession by Western Maryland is highly unlikely, Basu said. Even Strzelczyk himself said that he is still working to get enough support from all five counties, and has no intention of forcing the change if a majority is uninterested.

Even if the movement is popular among residents, it will require approval from the state legislature and Congress. While it may not always represent the region evenly, the state government holds its western counties dear, Basu said.

While he understands the frustration Western Marylanders are feeling, Basu said their energy would be better used in developing the regional economy.

“We like the shape of our state, we like the history, we like to say that our state stretches from the mountains to the ocean,” he said. “This is not going to go anywhere.”

A solution, he said, likely will not come from the legislative body, due to population distribution across the state. It could, however, come from a governor who advocates for the rural areas — an asset he said has been absent for decades.

“It’s been quite some time since we’ve had a governor that viewed Western Maryland as important,” Basu said. “Rural Maryland has a lot to contribute, but because of the policy-making environment in Maryland, it’s not able to contribute nearly as much as it otherwise would.”

For Frick, the argument against secession is somewhat sentimental.

Without the five counties, the state “would lose part of its essential Maryland-ness,” he said. “This is the Old Line State and we’re all in this together.”