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Economic Development History of Interstate 68 in Maryland

Interstate 68 shield

Interstate 68: "The National Freeway"

1.1 Project Length/Location

Interstate 68 (I-68) is a 116-mile, east-west freeway that links the western Maryland panhandle to northeast West Virginia. The eastern end, west of Hancock, MD, is located approximately 90 miles west of Baltimore, 100 miles northwest of Washington, DC, and 150 miles south of Pittsburgh. It is known as "The National Freeway" because its Maryland portion generally follows the route of the Old National Road, an important artery throughout the nineteenth century. I-68 extends from the I-70 junction west of Hancock, MD to the I-79 junction near Morgantown, WV. It connects the Mid-Atlantic region, and particularly the Baltimore- Washington metropolitan areas to the Midwest and West Virginia. I-68 is among the few two-digit Interstates that does not enter a major metropolitan area; the largest city between the endpoints is Cumberland, MD, with a population of only 20,859 residents based on the 2010 U.S. Census. This study concentrates on the 82-mile segment in Maryland.

Figure 1: Map of I-68 in Maryland

The map shows the location of I-68 in Maryland from Garrett county in the west through Allegany county to Washington county on the east.

The map above shows the location of I-68 in Maryland. According to the U.S. Office of Management and Budget (OMB) designations, I-68 traverses two Metropolitan Statistical Areas (MSAs) in Maryland: Cumberland, MD-WV and Hagerstown-Martinsburg, MD-WV. MSAs are statistical groupings based on strong social and economic ties to the economic center such as Cumberland in the Cumberland, MD-WV MSA. The counties mentioned in the Metropolitan Statistical Areas (MSAs) are lightly shaded and labeled on the map. Allegany County is in the Cumberland, MD-WV MSA. The Hagerstown-Martinsburg, MD-WV MSA includes Washington County. Garrett County is in a non-metropolitan area.

1.2 Details of Construction

The freeway that is now I-68 was originally designated as U.S. 48.[1] It was constructed and opened in segments starting in the mid-1960s and finally completed in 1991. In late 1966, the completed sections were limited to a three-mile segment west of Hancock in Washington County and a one-mile segment of the Cumberland Thruway, east of Cumberland. From 1966 to 1976, the section from Cumberland to the West Virginia-Maryland border was built, culminating in the opening of the 13-mile segment from Finzel Road to the Keyser's Ridge interchange. West Virginia's sections of I-68 were constructed, also as U.S. 48, between 1970 and 1976.

The section of I-68 from Cumberland to Hancock was constructed from the late 1970s to 1991. The 4.5-mile Sideling Hill Cut segment opened on August 15, 1985; the entire 8.7-mile Sideling Hill section was finished in 1986. The final segment of I-68, a 19-mile gap east of Cumberland, was built between 1987 and 1991. Upon completion of this "missing link," the State of Maryland formally opened I-68 on August 2, 1991. In total, the construction of I-68 in Maryland cost $1.81 billion (In 2012$).

1.3 Reasons for Project Development

During the mid-20th century, the region suffered from job losses in the natural resource and heavy manufacturing sectors. Prior to construction of the Interstate, east-west traffic through the Maryland panhandle traveled on U.S. 40, a two-lane road characterized by steep inclines and hairpin turns. Travel was slow and sometimes dangerous. The Appalachian Regional Development Act of 1965 designated the route that is now I-68 as Corridor E in the Appalachian Development Highway System, a road network intended to support economic development in Appalachia. The Appalachian Regional Commission partially funded the construction of I-68.

The construction of I-68 has helped the region adapt to these losses by attracting tourism and investment dollars from the Baltimore-Washington metropolitan areas, new manufacturing and the return of office uses that are well served by the improved transportation access to the area. In total, an estimated 800 to 1,000 jobs have been attracted to the region as a result of I-68.[2] I-68 also serves as a toll- and tunnel-free crossing of the Appalachian Mountains between Baltimore/Washington and the Midwest. It facilitates access to the Port of Baltimore, the closest seaport for many Midwestern industrial production centers. The next east-west Interstate Highway to the north is the Pennsylvania Turnpike (I-70 and I-76). As of June 2013, the passenger car cash toll on the section of the turnpike that is the primary alternative to I-68 (the I-70 segment from Breezewood, Pennsylvania to the Gateway toll plaza connecting to Ohio) is $13.75.

Table 1 on page 8 shows annual average daily traffic (AADT) on selected segments of I-68 from 1980 to 2007. In 2007, traffic ranged from 11,000 vehicles per day at the Maryland-West Virginia boundary to 46,000 vehicles per day in Cumberland. Traffic counts roughly doubled between 1980 and 2007.

Table 1: Average Daily Traffic on I-68 in Maryland: 1980-2007
County Location 1980 1985 1992 2003 Compounded Average Annual Growth Rate
2007 1980-1985 1985-1992 1992-2003 2003-2007
Garrett E. of West Virginia State Line 5,500 5,325 8,500 10,675 11,581 -0.6% 6.9% 2.1% 2.1%
Allegany Cumberland: Btwn. MD-51 & US-220 24,600 28,000 34,450 52,575 46,191 2.6% 3.0% 3.9% -3.2%
Allegany W. of Sideling Hill NA 8,200 14,975 14,375 15,161 NA 9.0% -0.4% 1.3%
Washington Hancock: W of Jct. I-70 7,300 9,600 15,500 19,675 19,851 5.6% 7.1% 2.2% 0.2%

Source: Maryland State Highway Administration

2 The I-68 Corridor/Western Maryland

2.1 Physical Features of I-68 Corridor

I-68 cuts through the Appalachian Mountains in the western panhandle of Maryland. Heading westward from its eastern terminus at I-70 in Hancock, I-68 passes over Sideling Hill, Town Hill, Big Savage Mountain, Negro Mountain, and crosses the Youghiogheny River before entering West Virginia.

The Sideling Hill Cut is a landmark on I-68 and a part of the region's economic development effort. The 340-foot deep cut exposes the cross-section of a syncline, or a fold in multi-layered rock. The cut posed a particularly difficult engineering challenge, and has been turned into a tourist site, with a visitor's center and museum describing how the cut was made through the mountains, and providing descriptions of the geography of the area. The visitor center permits motorists to view the engineering feat and to learn about tourist attractions in Maryland.

The Cumberland Narrows is a water gap, or the Narrows, that has affected transportation in western Maryland throughout the region's history. U.S. 40 (the Old National Road) and railroad lines crowd together through the narrow valley of Wills Creek northwest of downtown Cumberland. I-68 bypasses the Narrows on a more direct east-west orientation.

2.2 Transportation History of I-68 Corridor

The I-68 corridor played a vital role in United States economic development and westward expansion in the nineteenth century. Nationally significant road, canal, and railroad projects were constructed through the region in the early and mid-1800s.

I-68's name, "The National Freeway," is inspired by the National Road, the first and only Interstate Highway built by the federal government (all other Interstates are constructed by the States). The National Road started at Cumberland and extended westward across the Appalachian Mountains, the Ohio River, and the Midwest to a point near St. Louis. Most of the traffic east of Cumberland headed to the markets and port at Baltimore. The road was opened from Cumberland to Wheeling in 1818, and reached Columbus, Ohio by 1833. U.S. 40 traces portions of the route along the National Road in Maryland. Surviving artifacts along I-68 include the Casselman River Bridge near Grantsville in Garrett County (a stone arch bridge built in 1813), cast iron road markers, and the LaVale Tollgate House just outside Cumberland, which dates from 1836.

Construction of the Chesapeake and Ohio (C&O) Canal began in 1828. The goal was to link the Potomac River in Washington with the Ohio River. The canal was completed to Cumberland in 1850 but the advent of rail reduced demand, and the canal was never completed. The primary commodity hauled was western Maryland coal. The C&O Canal's peak traffic year was 1871, when 850,000 tons of coal was transported. Competition from railroads siphoned off the canal's traffic and floods repeatedly damaged it. The canal closed in 1924. Most of it survives today as the Chesapeake & Ohio Canal National Historical Park. Cumberland utilizes its canal heritage as an economic development tool in its Canal Place Preservation District.

The Baltimore & Ohio Railroad was the first rail link between the East Coast and the Ohio River Valley. Construction began in 1828. It reached Cumberland in 1842, eight years ahead of the C&O Canal. The B&O Railroad accomplished its goal of linking Baltimore to the Ohio River in 1852 when the tracks entered Wheeling, Virginia (now West Virginia). Most of the B&O Railroad's lines in the I-68 corridor remain active today as part of the CSX railroad network; the B&O merged into CSX in 1987.

A westward extension of I-68 in West Virginia was planned. The would-be new section of I-68 would have extended approximately 73 miles from its current terminus at the I-79/I-68 junction near Morgantown to Moundsville, a West Virginia community on the Ohio River.[3] The project was approved by the Federal Highway Administration in 2003 and if built, the extension would have been incorporated into the National Highway System. Due to the lack of funding during 2008, the project was postponed and the extension was forgotten.

Various interests have advocated for the creation of a north-south Interstate Highway corridor in Pennsylvania, Maryland, and West Virginia between I-79 and I-81 that would intersect and partially overlap with I-68 in western Maryland. It is conceived as a southward extension of I-99 from central Pennsylvania. Among the goals is to relieve traffic on I-81. Separately, engineering and environmental studies supported by the states of Pennsylvania and Maryland and the Federal Highway Administration are being prepared for the section of U.S. 219 from I-68 in Garrett County, Maryland to Meyersdale, Somerset County, Pennsylvania.[4] The goal is to identify improvements to U.S. 219 that will enhance safety and facilitate economic development of the region. This segment of U.S. 219 is part of Appalachian Development Highway System Corridor N. The corridor would continue on I-68 from the U.S. 219 junction eastward to MD-53 west of Cumberland. The improved highway would follow MD-53 southward to U.S. 220, which it would follow through West Virginia to Appalachian Development Highway System Corridor H, a major east-west highway that is now under construction.[5]

2.3 Interstate 68 Communities

The following are synopses of the three counties on Maryland's I-68 corridor:

Washington County: The eastern terminus of I-68 at I-70 is located in the narrowest part of the western Maryland panhandle, where the state's northern and southern borders are only two miles apart. I-68 traverses a sparsely populated area that includes the Sideling Hill Cut. Most of the county's residents live far from I-68 in and around Hagerstown, which is located at the junction of I-70 and I-81. Hagerstown is developing into a major transportation hub and is the tenth fastest-growing city in the state of Maryland. Residential growth in the Hagerstown area is fueled by commuters to the Baltimore-Washington metropolitan area.

Allegany County: Cumberland, the largest city on I-68 in Maryland, is the seat of Allegany County. It was once a major manufacturing center, with manufacturing plants producing large synthetic fiber, windshield glass, and tire plants. Many of these plants have closed, replaced by factories overseas. The NewPage Corporation operates a paper mill in Luke in the southwestern corner of Allegany County, about 15 miles south of I-68.

Located one mile from I-68, Frostburg State University has grown to be a prominent campus in the University System of Maryland. Some of the school's growth is fueled by the presence of I-68, as a majority of the student body originates from eastern Maryland counties. Over 90% of Frostburg State University comes from Maryland, making I-68 a necessary route of travel between home and school. The Allegany Business Center at Frostburg State University, a technology-based business park, is located near the university.

In the past several years, prisons have become a part of the region's economic development strategy. In 1996, Maryland opened the Western Correctional Institution, a medium security prison, in Cumberland. Most of the prisoners are transported to and from the Baltimore-Washington metropolitan area via I-68. Federal Correctional Institution Cumberland, a medium security Federal prison, is also located in Cumberland.

Coal mining has been an important industry for western Maryland since the early 1800s. Around 2.8 million tons of coal is mined in western Maryland every year.[6] More than 80% is consumed domestically. Ninety percent is used to generate electricity; the other 10% is burned at industrial plants. In 2011, almost 100% of domestic distribution of western Maryland coal was by truck.[7] Domestic distribution was to Maryland (61%), West Virginia (39%) and Pennsylvania with only 2,000 tons (less than 1%). In 2002, the 13 coalmines in Allegany County produced two million tons.

Allegany County and Mineral County, WV form the Cumberland, MD-WV MSA. Ridgeley in Mineral County is directly across the Potomac River from Cumberland and is within one mile of I-68.

Garrett County: I-68 traverses the northern portion of Garrett County; this section was completed in the mid-1970s. In 2011, Garrett County's nine coalmines produced a total of almost 900 thousand tons.[8] More than 70% of the tonnage was from surface mines. Along with coal mining and timber harvest, tourism is a major industry in Garrett County. Maryland's only downhill ski resort (Wisp) is 15 miles south of I-68. Deep Creek Lake offers water recreational opportunities. Construction of I-68 facilitated access to these recreational sites and allows residents of the Baltimore and Washington areas to maintain vacation homes there.

3 Socioeconomic Trends in the I-68 Corridor

3.1 Population

Table 2 shows that the population along the I-68 corridor increased at a slower pace than the statewide growth rate, and did so both before and after the freeway was completed in 1991. Allegany County continued to lose population after I-68's completion, but the rate slowed from a compounded average annual loss of 0.6%from 1976 to 1991 to losses of 0.1% from 1991 to 2002 and a slight gain of 0.2% from 2002 to 2009. Allegany seems to have stabilized their population at around 74,000 to 75,000 people. Garrett County population grew faster in the years before completion of I-68. This may be because I-68 (then signed as U.S. 48) opened through Garrett County in 1976, inducing growth at an earlier date. Garrett's population increases on weekends and holidays when residences visit their vacation homes.

Table 2: Population: 1969-2011
County 1969 1976 1991 2002 2009 2011 Compounded Average Annual Growth Rate
1969-1976 1976-1991 1991-2002 2002-2009 2009-2011
Washington Top of Form103,073Bottom of Form 110,774 124,097 134,831 146,953 148,203 Bottom of Form 1.0% 0.8% 0.8% 1.2% 0.4%
Allegany Top of Form84,207Bottom of Form 81,938 75,305 74,204 75,101 74,692 Bottom of Form -0.4% -0.6% -0.1% 0.2% -0.3%
Garrett* Top of Form21,440Bottom of Form 24,749 28,747 29,987 30,145 30,051 Bottom of Form 2.1% Bottom of Form 1.0% 0.4% 0.1% -0.2%
MD I-68 Corridor 208,720 217,461 228,149 239,022 252,199 252,946 0.6% 0.3% 0.4% 0.8% 0.1%
Maryland Top of Form3,868,000Bottom of Form 4,172,132 4,867,641 5,440,389 5,730,388 5,828,289 Bottom of Form 1.1% 1.0% 1.0% 0.7% 0.9%

* Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of Economic Analysis

3.2 Employment

As shown in Table 3 below, total full-time and part-time employment has grown at a slower pace in the I-68 corridor than it has throughout Maryland, both before and after the freeway was completed. Only recently did the MD I-68 Corridor experience employment growth that is greater than Maryland, most likely due to a better recovery after the recession. Likely due in large part to a global economic downturn, the counties finished 2009 with approximately the same employment levels as 2002. Even with a decelerated growth, Garrett still maintains the highest growth rate for all periods except for 2009-2011.

Table 3: Total Employment: 1969-2011
County 1969** 1976** 1991** 2002 2009 2011 Compounded Average Annual Growth
1969-1976 1976-1991 1991-2002 2002-2009 2009-2011
Washington 45,669 48,551 66,178 75,604 77,769 78,953 0.9% 2.1% 1.2% 0.4% 0.8%
Allegany 36,153 33,227 35,577 37,173 37,821 38,157 -1.2% 0.5% 0.4% 0.2% 0.4%
Garrett* 6,558 8,868 15,227 18,382 20,476 20,559 4.4% 3.7% 1.7% 1.6% 0.2%
MD I-68 Corridor 88,380 90,646 116,982 131,159 136,066 137,669 0.4% 1.7% 1.0% 0.5% 0.6%
Maryland 1,679,355 1,865,565 2,662,392 3,142,315 3,366,279 3,395,660 1.5% 2.4% 1.5% 1.0% 0.4%

* Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget
**Based on The Standard Industrial Classification (SIC) and a combination of Full and Part-Time Employment
Source: Bureau of Economic Analysis

Table 4 highlights unemployment levels and unemployment rates for each county. During the decade following the completion of I-68, unemployment levels in the I-68 corridor dropped significantly, likely due to economic prosperity between the period 1990 and 2000. Since 2000, unemployment levels have risen significantly due to the financial crisis that hit in 2007.

Table 4: Unemployment: 1990-2010
County 1990 2000 2010
Labor Force Level Rate Labor Force Level Rate Labor Force Level Rate
Washington 60,585 4,143 6.8% 66,332 2,428 3.7% 69,897 6,937 10.3%
Allegany 32,375 3,622 11.2% 32,993 1,958 5.9% 36,926 3,277 9.2%
Garrett* 13,440 1,276 9.5% 14,560 759 5.2% 17,430 1,360 8.1%
MD I-68 Corridor 106,400 9,041 8.5% 113,885 5,145 4.5% 124,253 11,574 9.6%
Maryland 2,556,130 117,582 4.6% 2,785,444 100,276 3.6% 2,967,373 222,553 7.5%

Source: County Annual Average, Bureau of Labor Statistics

3.3 Personal Income

Real per capita personal income in all of the I-68 counties is lower than in Maryland as a whole. Poverty is not a new problem in western Maryland. President Lyndon Johnson delivered a major address on his "War on Poverty" in Cumberland in 1964.

Income growth has slowed in the first decade since the freeway's completion in 1991 in all counties except Washington, where the economy is much more dependent on I-70 and I-81 than on I-68. Garrett County experienced faster income growth than the State in all but one of the time periods depicted.

Table 5: Real Per Capita Personal Income: 1969-2011
County 1969 1976 1991 2002 2009 2011 Compounded Average Annual Growth Rate
1969-1976 1976-1991 1991-2002 2002-2009 2009-2011
Washington $17,229 $19,995 $25,668 $33,994 $36,562 $37,670 2.1% 1.7% 2.6% 1.0% 1.5%
Allegany $15,562 $18,062 $24,139 $28,942 $32,164 $33,044 2.2% 2.0% 1.7% 1.5% 1.4%
Garrett* $11,529 $15,009 $21,597 $31,827 $36,712 $39,151 3.8% 2.5% 3.6% 2.1% 3.3%
MD I-68 Corridor $14,773 $17,689 $23,801 $31,588 $35,146 $36,622 2.6% 2.0% 2.6% 1.5% 2.1%
Maryland $20,957 $24,475 $35,903 $46,422 $49,955 $51,562 2.2% 2.6% 2.4% 1.1% 1.6%

* Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Per Capita Personal Income, Unadjusted, Bureau of Economic Analysis (adjusted to 2012$ based on BEA Deflator for GDP)

3.4 Industry Mix

Table 6 shows the non-farm employment by industries in the I-68 corridor (sum of the three I-68 counties) in selected years from 1969 to 2011. The fastest-growing sector before 1991 was Services. The North American Industry Classification System (NAICS) implemented in 1997 redefine the "Services" and made further comparison difficult. The fastest-growing sector after completion of I-68 was Finance/Insurance/Real Estate. Based on the changes implemented by NAICS, the periods between 1969-1991 and 2002-2011 should be analyzed independently.

I-68 may have helped to stem the loss of manufacturing jobs; whereas the corridor lost manufacturing positions at a compounded average annual rate of 1.8% from 1976 to 1991 and a compounded average annual rate loss of 1.3% from 1991 to 2001.

Table 6: Non-Farm Employment by Industry in the I-68 Corridor: 1969-2009
Industry Sector 1969** 1976** 1991** 2002 2009 2011 Compounded Average Annual Growth
1969-1976 1976-1991 1991-2002*** 2002-2009 2009-2011
Ag. Services/Forestry/Fishing 332 357 289 377* 374 398 1.0% -1.4% NA NA 3.2%
Mining 496 828 733 671 611 739 7.6% -0.8% -0.8% -1.3% 10.0%
Construction 4,583 5,246 6,944 8,512 8,336 7,579 1.9% 1.9% 1.9% -0.3% -4.6%
Manufacturing 26,751 21,424 16,416 14,214 9385* 10,526 -3.1% -1.8% -1.3% NA NA
Transportation/Public Utilities 7,641 6,256 4,402 5,825 5,985 6,460 -2.8% -2.3% 2.6% 0.4% 3.9%
Wholesale Trade 2,636 2,833 4,207 596* 705* 573* 1.0% 2.7% NA NA NA
Retail Trade 13,592 15,549 24,717 18,288 19,117 19,149 1.9% 3.1% -2.7% 0.6% 0.1%
Finance/Insurance/Real Estate 3,328 3,763 5,936 7,472 8,073 8,776 1.8% 3.1% 2.1% 1.1% 4.3%
Services 13,412 16,939 29,996 NA NA NA 3.4% 3.9% NA NA NA
Government/Gov't Enterprises 12,800 14,413 17,154 17,043 18,467 18,369 1.7% 1.2% -0.1% 1.2% -0.3%
Total Nonfarm Employment 85,571 87,608 114,426 129,070 134,067 135,634 0.3% 1.8% 1.1% 0.5% 0.6%

*Data for a county or more is missing resulting in an unbalanced total (Alegany: Whole Sale (2011); Garrett: Manufacturing (2009) Whole Sale (2002, 2009); Washington: Forestry (2002) Whole Sale (2002, 2009, 2011)
**Note: SIC measurements used
***Period for which SIC and NAICS overlap
Source: Bureau of Economic Analysis

Table 7 compares the corridor, state, and national industry mix derived from total nonfarm employment. Manufacturing has historically been more important to the I-68 corridor than to Maryland and the U.S., but this trend has diminished over several decades. While manufacturing is still nearly twice as prevalent in the corridor as it is in the state as a whole, it has fallen to slightly above the national average in 1991 and then below in 2009. Like in the U.S. as a whole, manufacturing employment has declined precipitously in recent decades in the I-68 corridor. Whereas one in three (31.3%) I-68 corridor workers were employed in manufacturing in 1969, only one in fourteen (7.0%) worked in that sector in 2009.

Table 7A: Industry Sectors as a Percentage of Total Non-farm Employment: 1969-2001
Industry Sector 1969 1991 2002
Corridor Maryland U.S. Corridor Maryland U.S. Corridor Maryland U.S.
Ag. Services/Forestry/Fishing 0.4% 0.6% 0.6% 0.3% 0.9% 1.0% 0.3% 0.2% 0.5%
Mining 0.6% 0.2% 0.8% 0.6% 0.1% 0.8% 0.5% 0.1% 0.5%
Construction 5.4% 6.1% 5.1% 6.1% 6.4% 5.0% 6.6% 6.9% 6.0%
Manufacturing 31.3% 17.3% 23.6% 14.3% 7.6% 14.1% 11.0% 5.2% 9.7%
Transportation/Public Utilities 8.9% 5.4% 5.5% 3.8% 4.5% 4.9% 4.5% 2.9% 3.3%
Wholesale Trade 3.1% 3.8% 4.7% 3.7% 4.3% 4.9% 0.5% 3.2% 3.8%
Retail Trade 15.9% 16.4% 15.4% 21.6% 17.3% 16.7% 14.2% 11.1% 11.2%
Finance/Insurance/Real Estate 3.9% 6.4% 6.8% 5.2% 8.5% 7.8% 5.8% 4.6% 4.9%
Services 15.7% 19.2% 19.2% 26.2% 31.5% 28.9% NA NA NA
Government/Gov't Enterprises 15.0% 24.8% 18.2% 15.0% 18.9% 15.8% 13.2% 17.0% 14.5%
Table 7B: Industry Sectors As Percent of Total Nonfarm Employment: 2009
Industry Sector 2009
Corridor Maryland U.S.
Ag. Services/Forestry/Fishing 0.3% 0.2% 0.5%
Mining 0.5% 0.1% 0.7%
Construction 6.2% 6.5% 5.6%
Manufacturing 7.0% 3.8% 7.3%
Transportation/Public Utilities 4.5% 2.7% 3.2%
Wholesale Trade 0.5% 2.9% 3.6%
Retail Trade 14.3% 10.0% 10.4%
Finance/Insurance/Real Estate 6.0% 5.0% 5.5%
Services NA NA NA
Government/Gov't Enterprises 13.8% 16.6% 14.4%

Note: NAICS data. Source: Bureau of Economic Analysis

3.5 Business Establishments

The numbers of business establishments in each I-68 corridor county and Maryland in selected years from 1964 to 2008 are presented in Table 8. The Census Bureau defines an "establishment" as "a single physical location at which business is conducted or services or industrial operations are performed." It is not necessarily identical to a company or enterprise, which may consist of one or more establishments. Before 1974, the Census Bureau used "reporting units" as the unit of measurement. The definition of "establishment" has changed since it was first adopted in 1974, most significantly in 1983. Even though Allegany County suffered losses after 1991, growth in the number of business establishments outpaced the national and state growth rates in Washington and Garrett counties both before (1976 to 1991) and after (1991 to 2008) the freeway's completion.

Table 8: Business Establishments: 1964-2008
County Reporting Units* Establishments*
1964 1976 1991 2001 2008
Washington 1,719 2,000 2,937 3,362 3,589
Allegany 1,556 1,541 1,868 1,821 1,720
Garrett** 319 446 750 892 983
MD I-68 Corridor 3,594 3,987 5,555 6,075 6,292
Maryland 50,022 68,011 114,999 129,301 138,607

*Data are not comparable across all years because of definitional changes. In 1974, the Census Bureau changed from a "reporting unit" concept to establishment-based data. The definition of "active" establishments changed in 1983.
** Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: Bureau of the Census, County Business Patterns.

3.6 Property Value Changes

Median home values are a measure of property values in a particular region.

Table 9 compares median values in constant dollars of owner-occupied, non-condominium housing units in the I-68 counties and Maryland from 1980 to 2009. Home values in all I-68 counties were below the state median values in all reported years. Home values in all I-68 counties grew slower than Maryland from 1980-90 and 2000-2009, and faster than Maryland from 1990-2000. The growth rate for home values slowed in the 1990s in Washington and Garrett counties and in Maryland then picked up again from 2000 to 2009. The growth rate increased in Allegany County in the 1990s and 2000s.

The growth in second home prices has contributed to a corresponding modest increase in the prices of primary residences. In Garrett County, homes that sold for around $100,000 as recently as 10 years ago now sell for $150,000 to $200,000. In 2007, Forbes Magazine listed Allegany County among the top ten areas for growth in housing values. While home prices are still less expensive than most areas of Maryland, wages in the region have not seen a corresponding increase, and housing price increases are stretching the means of some residents.

Table 9: Real Median Value of Specified Owner-Occupied Non-condominium Housing Units: 1980-2009
Location 1980 1990 2000 2009** Compounded Average Annual Growth Rate
1980-90 1990-2000 2000-2009
Washington Co. $109,373 $132,533 $149,561 $233,873 1.9% 1.2% 5.1%
Allegany Co. $75,088 $74,570 $92,468 $131,475 -0.1% 2.2% 4.0%
Garrett Co.* $86,194 $96,127 $112,366 $180,988 1.1% 1.6% 5.4%
Maryland $142,933 $186,026 $189,878 $335,640 2.7% 0.2% 6.5%

*Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
**Source data: the American Community Survey & Decennial Census (Bureau of the Census) (2012$).

Sales of vacation homes in Garrett County have increased the assessed value of many homes and generated more property tax revenue, according to the local economic development office. The county has benefited from the excess property tax revenue due to the fact that vacationers do not require expensive government services such as public schooling. Most vacation homes are not included in the Table 9 figures.

4 Economic Development Trends

4.1 Now on the National Map

Traditionally, the economic base of a region is composed of natural resource industries (coal mining and timber), tourism, and manufacturing in roughly equal proportions. Allegany has shifted their economic base more or less. Many of Allegany County's coalmines have closed over time, resulting in job loss. In recent decades, progressively more manufacturing industries are shutting down. Manufacturers of tires, windshield glasses, synthetic fibers, and eye care products have left the region, where they used to thrive.

Casper R. Taylor Jr., president of the western Maryland Economic Development Task Force and former Speaker of the Maryland House of Delegates, said that I-68's existence made "all the difference to a community that was caught in the Rust Belt."[9] Additionally he said that I-68 has helped revitalize the region. Economic development initiatives commenced over 20 years ago are now "coming into focus."

Before I-68 was completed in 1991, Cumberland was among the few Metropolitan Statistical Areas in the country that was not on the Interstate Highway System. The deputy director of Allegany County Economic Development said that "the community suffered substantial economic hardship," especially because site location consultants in the 1970s and '80s refused to consider locations not served by Interstate Highways.[10] As rail diminished in importance in freight logistics (Cumberland has a major maintenance shop on the CSX Railroad system), trucking and Interstate Highway proximity became crucial to production and distribution. As a result, western Maryland was "not on the map" when new facility sites were selected.

Freeway access has proved itself to be helpful to both manufacturing and service businesses. In early 2005, American Woodmark Corp. opened a 250,000 square feet cabinet assembly facility in the new Barton Business Park a few miles north of I-68 on U.S. 220. As of April, 2011, the facility employed 330 workers[11]. Companies have located call center facilities in western Maryland because I-68 allows personnel to travel quickly to and from Baltimore and Washington; managers are able to do business in both areas in a single day. Visiting a "back office" in western Maryland no longer required an overnight stay.

Many credit the completion of I-68 through western Maryland with stabilizing a declining economy. Although several large manufacturers left Allegany County, the region has successfully attracted new manufacturing and distribution businesses. Manufacturing firms such as Closet Made (a manufacturer of closet organizers with 75 employees), Robison Supply (a manufacturer of gutters and downspouts with five employees), and Total Biz Fulfillment (shipping, packaging and distribution) in Garrett County, access to I-68 was the deciding factor to locate businesses in the region. Allegany County succeeded in attracting a Blue Cross/Blue Shield accounts center (with 112 employees), PharmaCare (a pharmacy distribution company with 130 jobs), and InfoSpherix (a telecom/customer service center with 435 employees). Part of the attraction was due to the better access to labor and customers provided by the Interstate.

The project improved safety and greatly reduced travel times to and from surrounding metropolitan areas. The Interstate reduced travel time between the Allegany region and the Baltimore-Washington metropolitan areas. Time between Allegany and area airports including Baltimore-Washington International Thurgood Marshall Airport, Dulles International Airport, and Ronald Reagan Washington National Airport, was reduced from as much as four hours to just two or two-and-a-half hours.

Interchanges along the I-68 corridor have attracted several fast food restaurants, gas stations, truck stops, lodging establishments, and other traveling and trucker services. There are approximately 70 of these businesses at corridor interchanges, with an estimated total of 750 jobs. Overall, from the end of construction until 2005, I-68 has seen a modest employment growth with nearly a 1,000 new jobs in manufacturing, tourism, and highway-related services added to the region as result of the highway.[12] Retail sales and property values have also increased because of the new tourism and second home industries served by the highway.

Garrett County maintains three industrial parks. One such park in the central part of the county took nearly 25 years to reach full occupancy; however, Northern Garrett Industrial Park near I-68 in Grantsville reached capacity within ten years of opening. Closet Maid constructed a manufacturing and distribution facility there in 2007. Existing businesses include a warehouse facility and a rafter/truss manufacturer. Based on the success of the other I-68 facility, the Keyser's Ridge Industrial Park opened on I-68 at the U.S. 219 junction.

Allegany and Garrett counties are among the eight economically distressed jurisdictions that are covered by the State's One Maryland tax credit program. Businesses that initiate major investment projects are eligible for a "project tax credit" for the cost of acquiring, constructing, rehabilitating, installing, and equipping an economic development project and a "start-up tax credit" for the expense of moving a business from outside Maryland and for the costs of furnishing and equipping a new location for ordinary business functions.[13]

4.2 Boost to Tourism

I-68 has made the recreational amenities of Garrett County more accessible to visitors from the Baltimore-Washington metropolitan areas.[14] I-68 has reduced travel times to the region by at least one hour. An increasing number of Baltimore and Washington residents maintain vacation cottages and condominiums in the Deep Creek Lake section of Garrett County. The local economic development agency discovered from records of real estate sales that the location of purchasers has shifted since I-68 was completed in 1991. In 1985, purchasers in southwestern Pennsylvania and local counties together accounted for half of Garrett County real estate acquisitions.[15] By 1994, these areas were responsible for just 30 percent of real estate purchases. The share of purchases increased the most from buyers in non-local Maryland (especially Baltimore and the Washington suburbs), which accounted for 45 percent of Garrett County real estate purchases in 1994.

Economic development professionals in both counties have pointed to the I-68 as the source of growth for their tourism industry. Prior to construction of the Interstate, the Deep Creek Lake area of Garrett County primarily attracted tourists and second-home buyers from the blue collar population around Pittsburgh. After the I-68 was built, more affluent people from the Baltimore-Washington metropolitan areas began to purchase second homes in Garrett County. One interviewee stated that in the 1970s, a second home at Deep Creek Lake selling for $100,000 was considered high-end. As of recently, there are several vacation homes selling in excess of $3 million on the shores of Deep Creek Lake. With the construction of more second homes, the county has seen an increase in retail and service establishments. Sales and Use Tax receipts have increased from $7.5 million in 1996 to over $15.2 million in 2006.

While Allegany County has fewer second homes, the newly developed Rocky Gap Resort is a source of new attraction. The Rocky Gap Resort, complete with an award-winning Jack Nicklaus golf course, opened adjacent to the Rocky Gap State Park at an I-68 interchange. According to a spokesman for the county, this development would not have happened without the Interstate. The Canal Place Heritage Area and Western Maryland Scenic Railway are among the projects that utilized the county's transportation history to boost tourism.

Retailers have noticed the vacationers' spending potential. Foodland Fresh grocery store in McHenry, a community near Deep Creek Lake, has scheduled street fairs and other events to lure vacationers into their towns.

I-68 has also made western Marylanders feel more connected to their state. Before completion of I-68, many viewed Pittsburgh as the nearest metropolitan area and their passion for sports aligned with Pittsburgh's teams. The county of Allegany and Garrett rooted for the Steelers football and Pirates baseball teams. Now, western Marylanders are pressing their cable television service providers to include Baltimore and Washington television stations.

4.3 Non-Transportation Factors

Land use and economic development in Garrett and Allegany Counties are somewhat constrained by State land use policy. In 1997, Governor Parris Glendening introduced a statewide "smart growth" initiative aimed at curbing sprawl. Counties were asked to submit plans showing priority growth areas. Under the initiative, State financing for infrastructure would be targeted to already developed areas, or areas where infrastructure already existed. Given the relatively undeveloped characteristic of Garrett and Allegany Counties, there were fewer prime development areas in the region. With fewer prime locations, less state money was available to support economic development efforts. Some economic development officials in the region believed the state policy suppressed the potential of I-68 for attracting new businesses to the area.

Both counties have actively worked to offset the job loss at large manufacturing plants by developing several industrial and business parks aimed at attracting manufacturing plants, technological firms, and back office jobs. Both counties experienced increases in tourism, particularly around Deep Creek Lake (Garrett County) and Rocky Gap (Allegany County).

The region of I-68 continues to lag in economic performance in comparison to the state and nation level. Relative to the state of Maryland, several factors that inhibit the region's competitive position includes the skill and educational levels of its labor force, population density, access to freight maritime ports, rail intermodal facilities, energy costs, taxes, and distance to commercial airports. Low housing costs represent a competitive advantage for the region.

4.4 Retail Sales

Table 10 provides detail on retail sales for each county in the corridor.

Table 10: Retail Sales in 2007 in Thousands of Dollars
County Motor Vehicle and Parts Dealers Building Material , Garden Equipment & Supplies Food and Beverage Stores Gasoline Stations General Merchandise Stores Other Sales Total Sales
Washington Co. $576,280 $170,627 $284,732 $359,928 $385,356 $686,348 $2,463,271
Allegany Co. $140,320 $96,850 $140,521 $100,841 NA $386,664 $865,196
Garrett Co.* $135,000 $56,229 $40,145 $70,298 NA $129,716 $431,388
Total Corridor $851,600 $323,706 $465,398 $531,067 $385,356 $1,202,728 $3,759,855
Maryland $17,834,244 $6,271,828 $12,555,365 $7,208,361 $9,773,482 $22,020,906 $75,664,186

* Indicates county that is classified as non-metropolitan by the U.S. Office of Management and Budget.
Source: US Census Bureau, 2007 Economic Census

5 I-68 Summary

The I-68 corridor was the site of pioneering transportation improvement projects linking the Atlantic Seaboard and Midwest in the wagon road, canal, and railroad eras of the 19th century, but the region was left out of the 20th century's greatest transportation project - the Interstate Highway System - until recently. The completion of I-68 in 1991 has allowed western Maryland to have the opportunity to reach its potential in the automobile age. The freeway has facilitated access to an economically depressed region that continues to reel from manufacturing plant closures. Western Maryland is re-orienting from a focus solely on Pittsburgh to one that also includes Baltimore and Washington. Residents of the Baltimore-Washington metropolitan area are increasingly visiting western Maryland for tourism and recreation. Freeway access and tax incentives have attracted manufacturers and other tenants to industrial parks along I-68.


[1] For a summary of I-68's history, see "Building the National Freeway," Maryland Roads, Aug. 2, 1991 (special edition).

[2] EDRGroup SHRP CO3 Project case research and interviews.

[3] Jim Cochran and Lori A. Smithberger, "I-68 Eligible for Federal Funding," Wheeling (W.Va.) News-Register, September 10, 2003.

[4] www.us219.com

[5] Mona Ridder, "Federal government, states find it hard to agree on new route," Cumberland (Md.) Times-News, May 10, 2004.

[6] Energy Information Administration, Annual Coal Report 2011. Table 2 (Coal Production and Number of Mines by State, County, and Mine Type, 2011).

[7] Energy Information Administration, "Domestic Distribution of U.S. Coal by Origin State, Consumer, Destination and Method of Transportation, 2011."

[8] Energy Information Administration, Annual Coal Report 2011. Table 2 (Coal Production and Number of Mines by State, County, and Mine Type, 2011).

[9] Telephone interview with Casper R. Taylor, June 29, 2004.

[10] Telephone interview with John R. Kirby, Jr., Allegany County Economic Development, June 25, 2004.

[11] Allegany Major Employers List, Allegany County Official Website, April 2011. http://www.alleganyworks.org/employers.php

[12] EDRGroup SHRP CO3 Project case research and interviews.

[13] Maryland Department of Business and Economic Development, "ONE MARYLAND Tax Credit Program" (Marcy 2004).

[14] Telephone interview with Peggy Jamison, Economic Development Specialist, Garrett County Economic Development, June 24, 2004.

[15] Garrett County Economic Development Department, "Deep Creek Area Growth Analysis" (July 1988 & update-August 1995).

Updated: 08/06/2013
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