by Brian Shane – Staff Writer – for
OCEAN CITY — Worcester County is a bright spot as taxpayers are voting with their feet, according to a new study on regional population migration.

A report by nonprofit fiscal policy group Change Maryland said Worcester County’s tax base saw the most new residents statewide from 2009 to 2010, even as the state of Maryland lost about 31,000 residents and $1.7 billion from the tax rolls.

At the same time, Wicomico County had the second-greatest amount of population loss among taxpayers, second only to Baltimore City, according to the report.

The Eastern Shore counties of Kent, Queen Anne’s and Talbot showed increases in their tax base at a higher rate than other counties for the time period.

Somerset County came in about flat, with a .16 percent increase in tax base, from less than 500 new resident taxpayers.

“I’m very encouraged by how well we’re doing in the rural and outlying counties,” said Larry Hogan, chairman of Change Maryland. “These small economic engines are powering the state forward by attracting new residents.”

The state’s largest regions by population, including Baltimore, Montgomery, and Prince George’s counties, plus Baltimore City — saw flat or negative growth among taxpayers, the report shows.

Maryland’s tax revenue loss was the seventh-highest in the nation, according to the report.

The figures come from Internal Revenue Service filings from 2009 and 2010, the most recent data that was available.

The IRS looks at the address for everyone who files a tax return from one year to the next, and they determine migration patterns of taxpayers during a given time, said Change Maryland spokesman Jim Pettit.

When asked what makes Worcester a desirable place for residents to live, Pettit said one reason is a viable two-party government where there are checks and balances on key decisions on spending and taxes.

“It’s just a healthy give-and-take on the county level. We don’t see that in some of our bigger counties. In fact, we don’t see it in practically all of them. That healthy give and take tends to bring a more rational tax policy.”

Baltimore City’s tax flight was the worst in the report, with a loss of 1.4 percent of their tax base in a year’s time based on migration.

Wicomico’s second-worst percentage by county showed a loss of .77 percent of the tax base.

“If you’re going to raise taxes on a diminishing pool of people, local officials face the specter of a downward death spiral — raising taxes to maintain the same level of service on a diminished pool,” Pettit said.

As a result, Pettit said state officials “need to take a hard look” at whether their policies or management could be causing tax flight.

Pettit said Maryland has raised taxes and fees 24 times dating to 2007, cutting $2.4 billion from the economy with a tax burden.