The state's unemployment rate rose slightly in August to 6.6%, up from 6.5% in July, according to the Maryland Department of Economic and Employment Development.

The department attributed the increase to the end of summer jobs as employment declined in restaurants, amusements, and agricultural services. In addition, government payrolls fell as cuts in maintenance and recreation programs began.

Overall employment in Maryland dropped 39,682, to 2.5 million. Even with the decline, employment remained over 48,700 above the August 1991 level of 2.45 million.

The department also reported that initial claims for unemployment insurance fell to 20,853 in August from 35,420 in July. Manufacturing employment showed a slight improvement in August.

However, the department reported that retail sales in July fell to $3.14 billion from $3.2 billion in June. Retail sales in July 1991 totaled $3.15 billion.

Maryland's Capital Debt Affordability Committee has recommended for the third consecutive year that the state's county transportation bond program be repealed.

In its annual report on recommended bond authorizations, the committee noted that county transportation debt between 1993 and 1998 is projected to account annually for over $100 million of state tax-supported debt.

"As state debt, the county transportation debt uses up valuable state capacity that could be used for needed state projects," the committee said in its report.

County transportation bonds are issued by the Department of Transportation and used to make loans to counties. The bonds are secured by taxes imposed and collected by the state, but which otherwise would be turned over to the counties. The program provides better market access and lower interest rates to counties than otherwise might be available.

The committee said the program is used most heavily by two of the state's most populated and financially sophisticated counties.

Eliminating the program would not "impose hardships on local governments, and the benefits once afforded by the program do not warrant its continuation," the committee said.

The General Assembly has never acted on the committee's previous recommendations for curtailment of the program, but may feel more inclined to do so this year. That is because the committee has projected no excess capacity to issue bonds in the near term.

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