Economic Modeling Tools: Static Versus Dynamic

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Daraius

Daraius

One of my favorite TV characters is Tim “the tool man” Taylor, and one of his great loves was new power tools. We can all remember the grunts of joy when a new tool passed through his hands. Invariably, he would use the tool incorrectly or overbuild something with the new tool—a lawnmower with 500 HP, for instance. For the last 20 years, RESI has undertaken numerous economic and fiscal impact models for federal, state, and local government as well as the private sector—by my last count, well over 100 studies. In each study, we used IMPLAN, a wonderful static input-output modeling tool. This past year, RESI has begun to use REMI PI+, a dynamic input-output modeling tool, for our economic and fiscal impact projects. REMI allows us to conduct dynamic economic and fiscal policy analysis. Cue manly grunt of joy.

 

What are the benefits of dynamic analysis?
Dynamic economic and fiscal policy analysis has been around since the early 90s and is currently used by state and federal governments to determine future policy impacts. The benefit to the dynamic aspect of analysis is the ability to estimate the compounding effect of a one-time shock over years. Traditional static analysis models are good for single-time projects, but to determine the impact of an Earned Income Tax Credit, the better method would be to create a dynamic forecast with a tool such as REMI.

 

For example, suppose a state government is considering a tax credit for renewable energy generation. The transactions of private firms taking advantage of this credit are ultimately weaved throughout the economy in the traditional “business cycle.” Think of a static model as providing an HD photograph of this tax change, a snapshot of the tax policy. The jobs, wages, and output derived from that shock are applicable to that specific period in a static model. The model can be used in a “create and support” situation, but to see the impacts of this tax policy over multiple periods, a dynamic model is more suitable.

 

REMI

Click the graphic above to read more about REMI

How can a dynamic model show the impacts of tax policy?
Think of a dynamic model like REMI as providing policymakers with an SD video of the tax change, as compared to the HD photograph that IMPLAN will provide. Economists can review the change from the baseline caused by the shock and see how the economy shifts through consumption pattern and price changes. Therefore, if the policy created 400 direct jobs and 20 indirect jobs, the impact of those jobs and wages throughout time may add up to more than 420 jobs. States such as Minnesota have used REMI in the past to forecast the potential impacts from their Green Solutions Act on their economy.

 

RESI looks forward to the new detailed and dynamic forecasting we can now offer our clients with REMI. It’s a shiny, new tool, and our team is ready to put it to work!

How will the online sales tax affect Maryland?

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Raquel

Raquel

When was the last time you paid sales tax to the state when making an online purchase for a store that did not charge you sales tax? Never? Although you are technically required to do so, you are probably not alone. Peter Franchot, the state’s Comptroller, estimates that Maryland is missing out on approximately $175 million in uncollected taxes as a result of noncompliance.

 
Overview of the Marketplace Fairness Act
The Marketplace Fairness Act, which has just been approved by the U.S. Senate, will require online retailers with sales of more than one million per year to collect and remit state sales tax. Proponents of the bill tout the benefits to smaller brick-and-mortar stores that cannot compete with online merchants that were not required to collect sales tax. Opponents point out that businesses with one million dollars in revenue per year are relatively small and would be hurt by the higher administrative costs.

 

Image credit:

Image credit: Naypong Digital Images


How will the online sales tax affect Maryland?
If approved, this legislation will no doubt have ramifications for online sellers as well as Maryland residents. For online sellers, it would likely result in higher administrative costs in order to track sales, calculate distinct tax rates, and complete the necessary paperwork. These higher costs, although initially borne by the seller, could eventually be passed on to consumers through higher prices. However, if the Act is approved, it would mean that the gas tax increase just recently passed in Maryland would increase by a smaller amount.

 

Maryland General Assembly officials report that if the online sales tax legislation is passed, it would correspond with a decrease of approximately seven cents from the gas tax hike. Either way, consumers will be paying higher taxes. However, who will bear the greatest costs will depend on individual consumer habits. Those who drive a significant amount but rarely shop online will probably benefit the most. On the other hand, those who drive long distances and do a significant amount of online shopping will probably bear the greatest impact. Although the bill easily passed a U.S. Senate vote, the U.S. House of Representatives vote is expected to present a greater obstacle.

MSDE Educator Effectiveness Academies – Year One Reflection and Moving Forward

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Aaron

Aaron

Back in January we filled you in on our exciting new project with Maryland State Department of Education (MSDE), where we were tasked to develop webinars for Maryland teachers that follow up on the content they were exposed to during the summer 2012 Educator Effectiveness Academy (EEA). We successfully launched the first four of these professional development webinars in January to a great response from MSDE staff and teachers statewide.

 

At the end of April we launched our second set of webinars to complete the professional develop releases for the current school year. In the upcoming weeks, we will be partnering with some of the Master teachers to provide live Virtual Office hours facilitated through WebEx. This will allow other teachers who’ve viewed the webinars to ask questions and engage with these Master teachers regarding the webinar content.

 

These webinars have already proven to be an excellent resource not only for the teachers who were able to attend the summer 2012 EEA, but also for teachers who were not able to attend and were interested in acquiring more information on Maryland Common Core State Curriculum Standards.

 

What’s next?
Because of the wide positive feedback from teachers across the state, MSDE has decided to expand our scope of work.  This year we will not just record a few selected EEA breakout sessions, but rather capture 12 full days of EEA content, spanning 5 different counties and composing of over 100 hours of content. This new scope will allow MSDE to segment the broad spectrum of summer 2013 EEA content into several programs targeted towards teachers and principals in all content areas, as well as in all grade levels. Towson University’s Center for Professional Studies will again utilize the Towson University Blackboard system to make all these programs available to teachers across the state.

Image credit: Washington Post

Image credit: Washington Post

The Town of Port Deposit and Towson University: A Partnership Story

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Kelsey

Kelsey

Tuesday May 7th was an important day for both Towson University and the Town of Port Deposit, as it signified the official establishment of a partnership between the two. A Partnership Celebration event was held in Port Deposit to bring both sides together to really kickoff this collaboration.

 

Click the image to view the full MOU

Click the image to view the full MOU

As you’ll recall from my earlier blog post, Dr. Richard Seigel of the Biological Sciences department has been doing research with his students on the Northern Map Turtle for a couple of years when TU got more involved last year. In that blog post, I mentioned that partners from the town and across campus were working on ways to do more work together. Since then, a formal memorandum of understanding (MOU) was created to solidify the partnership and outline the goals and expectations.

 

While the signing of this MOU by TU President Maravene Loeschke and Port Deposit Mayor Wayne L. Tome was the impetus for Tuesday’s Partnership Celebration, it was a unique and wonderful opportunity to bring together partners, university administrators, students, faculty, Town leaders, and Town residents.In addition to the ceremonial signing, the event included remarks from Mayor Tome, President Loeschke, Maryland State Delegate David Rudolph, and Cecil County Executive Tari Moore about how important this partnership is for the region. Dr. Seigel and his students also had educational exhibits about the Northern Map Turtle and took attendees on a walking tour of the nesting sites.

 

PD - MOU Signingsmall

TU President Maravene Loeschke and Port Deposit Mayor Wayne Tome sign the MOU for the Northern Map Turtle Partnership while Northern map turtle researchers Professor Richard Siegel and Towson alumna Teal Richards-Dimitrie are standing by.

PD - Gas House Toursmall

Event attendees on a walking tour of nesting sites

Even though there was rain for the event, the spirit of those in attendance was bright and cheerful. The challenge, or rather opportunity, in front of us now is to turn the language in the MOU into reality.  We’ll approach each of the tenets of the partnership through the lens of collaboration and learning.  The 4 tenets are:

  • Conservation
  • Education
  • Research
  • Economic Development
PD - Slate Piece - smalls

A gift from the Town of Port Deposit to event speakers

PathoS and DynaSystems Named Winners of TowsonGlobal’s 2013 Business Plan Competition

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Clay

Clay

After months of preparations, two teams emerged as the winners of the third Annual TowsonGlobal Business Plan Competition on May 1. The first place winner was PathoS, a Johns Hopkins University team that is developing low-cost cancer diagnostic solutions.  Second place went to DynaSystems, the developer of a patent-pending tire deflation device that enhances public safety.

 

  • PathoS –Delivers low-cost solutions that streamline the processes used in diagnostic pathology, such as reducing reoperations in Breast Conserving Surgery (BCS) by enabling clinicians to determine the success of the procedure before discharging the patient.
  • DynaSystems –Developed the patent-pending DynaSpike™ tire deflation device that allows police officers to safely end high speed pursuits using a hand held wireless remote.

 

TowsonGlobal Business Plan Competition first prize winner, PathoS, accepting an award check

The first place winner, PathoS, accepting an award check

 

The competition was held at Towson University’s West Village Commons where the five finalists made private presentations, which included an intense Q&A session by the panel of five judges. After much discussion and deliberation, the judges selected the two teams as the winners, with the other finalists not far behind.

 

DynaSystems making a private presentation in front of a panel of judges

DynaSystems making a private presentation in front of a panel of judges

The first place prize package is valued at over $17,000 and includes a monetary prize of $4,000, a 90-day Resident Membership to TowsonGlobal, executive coaching from CEO IQ and logo design by 99designs. The second place winner also receives a prize package valued at $5,200 which includes a monetary prize of $1,000, 90-day Associate Membership to TowsonGlobal, one year membership to the online community and resources of CEO IQ, and logo design by 99designs.

 

This year’s judges included leaders from M&T Bank, SC&H Capital, Renegade Communications, FireDrive Marketing Group, and Towson University. Their enthusiasm and dedication added to the excitement and caliber that the event reached this year.

 

TowsonGlobal’s goal with this competition is to inspire and support entrepreneurship, innovation, and small business development for Greater Baltimore and the region, and the ideas we have seen presented this year are very exciting!

 

The support of our sponsors in offering monetary and in-kind prizes is greatly appreciated. Thank you to:

• M&T Bank
• Vince Talbert
• SC&H Group
• Century Accounting & Financial Services
• The Columbia Bank
• Carrolton Partners
• Maryland Department of Business and Economic Development
• ABM
• WMJF-TV
• CEO IQ		 • SCORE of Greater Baltimore
• 99designs

Media

• CityBizList
• Bmore
• MyCity4Her

Student Videographers

• Matthew Collins
• Phillip Greenwood

Regional Economic Studies Institute Launches “Knowledge Center”

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Dawn

Dawn

As you know, I enjoy learning and sharing new things. My latest tech adventure involves creating a series of tutorials to assist you, our clients and partners, with key principles used to optimize business and organizational processes. These tutorials will be housed on Regional Economic Studies Institute (RESI)’s recently launched “Knowledge Center” page.

 

Our first tutorial focuses on how to write Standard Operating Procedures (SOPs), which are important documents for any business (see my previous post titled Three Scary Words). SOPs can provide your organization with the ability to understand the way your company works, streamline your communications processes, and increase your efficiency. This tutorial will explain the 5 Steps to Creating SOPs. 

 

The Benefits of Industry Certifications for High School Students

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Nancy

Nancy

It is the eternal “Catch-22” of being young and trying to get a start on a career: every potential employer says you are a great candidate, but you cannot be hired because you lack experience. How can you get that experience if you cannot even get in the door?

 

One way to beat the “lack of experience” challenge lies in gaining an industry certification while still in high school. Walking into a job interview with proof of certification in one’s pocket immediately puts a job applicant one step above non-certified candidates.

 

Photo credit: Flickr user Susanne13

Photo credit: Flickr user Susanne13

 

That little piece of paper validates that the possessor has demonstrated mastery of the most up-to-date skills in a career field that may be rapidly changing. Consider the IT industry: giants like CompTIA and Cisco regularly revise their industry certification examinations to reflect every new skill required in the field. A valid certification truly is “industry standard.”

 

Pursuing and achieving an industry certification allows high school students to acquire and practice some of the most critical college and career-readiness skills, such as critical thinking, focusing, and the ability to prioritize. Most certification tests occur in high-stress, timed environments: radically different from the typical high school test. Preparing and sitting for a certification examination is a reality check for a young person’s career aspirations. Few experiences can reinforce the concept of “no pain, no gain” better than persevering through the A+ or CCENT test, and few can build more pride and self confidence.

 

Gaining an industry certification signals to both potential employers and prospective colleges that this is a young person who is not afraid of challenges. That certification paper says, “Here is someone who is thinking ahead, who can set and achieve goals, who can bring initiative and commitment to the table.” The proof is in the paper!

Helping a Municipality Better Connect to Its Citizens

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Sharyn

Sharyn

Recently, the Division of Innovation and Applied research completed a website development project for the Town of Kensington located in Montgomery County, Maryland. When the Town of Kensington approached us about a website redesign, we spent time discussing their challenges and in the end provided a comprehensive solution that met the town’s needs, particularly in the areas of easier content management, use of dynamic content, and improved user experience.

 

The Town of Kensington's new home page

The Town of Kensington’s new home page

Content Management

The Town of Kensington’s main issue was that they could not easily update their website content. Due to this, communication between the citizens and the Town was sometimes challenging and cumbersome. After a demonstration of the easy to use WordPress interface, they were excited about the possibilities. They could clearly see how the use of dynamic content would ease communication because of the administrative interface they’d have access to through WordPress.

 

Dynamic Content

    • Because the Town of Kensington could not easily update content on their site, the content was rather stagnant. The first thing we suggested was the implementation of a blogging tool. The Town uses this as a way to share announcements. The announcements populate various sections of the site using the “Display Posts Shortcode” plug-in which allows for categories to display in desired locations.
    • As you can imagine with most towns, a calendar feature provides all the insight a citizen may need about social and town-oriented events like annual festivals and council meetings. The “All-in-One Event Calendar” plug-in is just what the Town was looking for. Citizens can view events on the calendar by week, day or month, and view by category. The Town of Kensington determined two categories – Official Events and Town Happenings – so that citizens could differentiate between officially hosted Town events and other events happening within town limits but not organized by the Town. The categories are color-coded to make viewing even easier. And best of all, the Town can provide all the information they like about each event.

      kenscalendar

      Kensington’s All-in-One Events Calendar

  • And of course the town has several key events they organize each year. Everyone likes to look at event photos to look for themselves or friends or just see what they may have missed. So, it was important to have the ability to post photos submitted by residents as well as photos they took at events. The “WP Photo Album Plus” plug-in allows for multiple albums that can be placed on the site and the administrator can customize the presentation for the album.

 

Improved user experience

  • As the previous Town website grew, the Town administration found that content was not as easy to find as they would have liked for their citizens. As we spoke with administrators, we found that organizing information related to how citizens would search the site was a key interest for them. In order to accomplish this, there are three sections that anchor the site’s new navigation – Residents, Town Government, and Around Town. These sections allow visitors to quickly find information they need that effects them as residents, how they can stay up to date on town developments, and how they can get around and enjoy everything Kensington has to offer. Also, prioritizing access to calendar and events was critical. Those items are easily accessible from the main navigation.

Matt Hoffman, the Assistant Town Manager, said “I really think the new site looks great! I think it meets all of our objectives, especially ease of navigation.”

  • Of course, one of the best ways to improve user experience is to review website analytics regularly to better serve your visitors. The “Google Analytics” plugin allows you to connect your website. The plug-in makes it very easy that once you have created the account in Google Analytics, only the ID number provided by Google Analytics needs to be included in the WordPress plug-in. In order to view analytics, the administrator needs to log into Google Analytics to see statistics that will allow Town Administrators to craft their web presence, by what areas of interest seems to be popular to visitors.

What is Cloud Computing?

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Matt

Matt

A new report from The Economist Intelligence Unit and IBM found that among 572 business leaders surveyed, almost 75% indicate their companies have piloted, adopted, or substantially implemented cloud in their organizations – and 90% expect to have done so in three years.  Cloud computing is truly a game changer. But what exactly does this buzzword mean?

 

Most of the time, when a company is offering you cloud computing services, they are offering you a service to outsource all or part of your IT to them and they’ll host it. These services can vary from only bare metal support to full application support.

 

Cloud computing comes in many flavors.  You probably are using cloud computing today and may not know it.

 

Image credit: Krom Krathog

Image credit: Krom Krathog

Do you have a Gmail or Yahoo webmail account? That is one form of cloud computing.  All of the processing of your email occurs on a server “in the cloud” and you access your email via a web browser.

 

Ever use Apple iCloud or Microsoft Sky Drive?  These are services that allow you to store and share files through the Internet and access these files on any device no matter where you go.  The key is that you are not relying on local hard drives, rather, files are stored in the cloud.  If your computer hard drive dies, no problem, the files are safe and backup up in the cloud.  Want to access a file on your Ipad as well as your work computer? No problem, it’s all in the cloud.

 

Ever watch a movie from Netflix’s online streaming service?  That is another example of cloud computing.  Movies are consumed on devices such as iPads and computers but the files reside on servers in a data center.  Netflix adopted a cloud computing model as it grew its base and eventually outgrew its data centers.  Instead of investing in building expensive new data centers, they outsourced their infrastructure to a cloud service provider.  This allowed them to meet spikes in viewer demand and save money.

 

Cloud computing is also a viable option for small businesses. For example, some companies may be able to host the email and collaboration services, and perhaps even document processing services. This saves the business from worrying about backups, maintenance, etc. Some of them may not even have an IT department or simply have one that is too small to start managing servers, workstations and the network itself. Sometimes it’s simply not worth buying the hardware for the servers or you may not have the in-house expertise to maintain it.  Data centers are expensive as they require air conditioning, UPS, and electricity.

 

Next time we will explore the advantages and pitfalls to watch out for when choosing a cloud service provider.

 

Happy and safe computing!

Decisions with Long-Term Impacts – The 2013 Legislative Session

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Raquel

Raquel

Since the 2013 Maryland Legislation session came to a close last week, we thought it would timely to focus on bills that would have a significant economic impact, particularly for the long-term prosperity of the state.

 

Approval of the transportation funding plan will inject a significant sum of money for the Red and Purple transit lines as well as a variety of transportation-related infrastructure improvements. Voting on the bill was expected to be close since funds would be raised through the gas tax increase. One of the debates against the bill was the increased gas prices for consumers and the impact that would have on their pockets. According to legislative analysts, the increase could total about $19 a year on average, increasing to as much as $100 per year on average as the tax rate increases are phased in. While the individual impact will be relatively small, the overall economic impact would be significant. For instance, the $4.4 billion dollars in funding will mean more activity for the construction and transportation sectors. In a report for the Maryland Highway Administration, RESI evaluated the return on investment of highway spending, and the results are significant. According to our findings:

  • The annual rate of return of highways spending totals approximately 17 cents per dollar spent.
  • Cost savings are also gained in the manufacturing industry, where an average highway dollar reduced annual production costs by more than 12 cents.

Nevertheless, the ultimate impact will be the availability of adequate transportation infrastructure that will continue to nurture the state’s economic vitality and improve its competitiveness against other states.

 

Image Credit: Holly Nunn, Southern MD News

Image Credit: Holly Nunn, Southern MD News

The Education sector was also a big winner this year as it received nearly half of the State’s general fund (nearly $16 billion). A number of initiatives seek to improve our children’s competitiveness in science, technology, engineering, and math disciplines. In addition, legislators approved $1.1 billion in funding for Baltimore City school construction projects that would renovate existing schools and build 15 new ones. The funding would help approximately 85,000 children enjoy updated and comfortable classrooms. Education continues to be a priority for the state and it shows. Last year, Education Week ranked Maryland schools number one for the fourth year in a row.

 

The proposal of the state’s minimum wage increase was defeated. The bill proposed increasing the minimum wage from $7.25 to $10 by 2015. Opponents argued that the increased wages would make the state less competitive and cause job losses. It is important to note that, although minimum wage discussion frequently stir up political debate, empirically speaking, no real evidence indicates that raising minimum wages significantly reduces employment.

 

Overall, this year’s legislative session was one of the most productive. The budget, which has been a source of contention in the past, passed without much fanfare, and legislators tackled several controversial issues. Regardless of how you feel about the ultimate results of the session, it was refreshing to see facts and figures rather than party squabbles dominate the headlines.