Economic Downturn Could Mean Service Slowdown Decrease In Growth Would Hurt Programs

October 07, 1990|By DARREN M. ALLEN | DARREN M. ALLEN,Staff writer

To economists and budget gurus, an economic downturn is often a statistical event, an event marked by drops in indexes, housing starts, tax revenue and other abstractions.

To someone dependent on a state-subsidized home or even to someone who is driving to work each day, an economic downturn is almost always a real event burdened with drops in pay, rises in costs and an increase of uncertainty.

"A decrease in money from the state or county would drastically decrease services," said L. Marie Kienker, bureau chief of the county's Housing and Community Development Office. "I don't want to see that happen."

No one wants to see that happen, but a downturn in Carroll's previously robust, growth-oriented economy could mean a downturn in the amount of money collected by local, county and state governments.

And a reduction in income could result in a reduction in services.

Already, some services and projects are in jeopardy. Just last month, the long-awaited Hampstead bypass was dealt another delay when the state announced that money for it had been frozen.

Should the economy deteriorate further, a concern for roads could give way to a concern for people's homes, health and safety.

"There's only a certain amount of money you can (lose) before you start affecting programs," said Jon C. Burrell, executive director of the Maryland Municipal League. "The problem of relying so much on property taxes, like cities and towns have to, is that as the state issues more and more mandates, they give us less and less money. Should property taxes drop, it could become a problem for cities to maintain (services) they already have."

So far, no one in Carroll is ready to press the budgetary panic button.

"While I don't see any improvements until spring or summer, I don't think we're in a lot of trouble right now," said R. Eugene Curfman, the county's finance director.

Improvement would mean an increase in construction of homes, offices and other buildings. It would mean an almost guaranteed rise in the property tax base and in the revenue that can be generated by that base. It would mean a slowdown in costs, like gasoline.

But those improvements are considered unlikely given the current economic downturn.

"When tax collections go down, you have to start wondering just what the minimum service acceptable to the town is," said Lloyd R. Helt Jr., mayor of Sykesville. "I think people here have basic expectations of their services -- twice-a-week garbage collection, parks, police. I don't know where you can cut those."

All of Carroll's budgets for the current fiscal year, which ends June 30, depend on a certain amount of growth to support a growth in expenses.

But in all of them, the amount of growth required to maintain the budget is far larger than the expected increase in expenses.

For example, in Hampstead, a 17 percent increase in spending was accompanied by a 9 percent drop in the 1990 tax rate -- all because of a property tax base that has increased by some 51 percent in the last two years.

That story -- a story that guarantees a maintenance of governmental services -- was played out all across the county this year. That story could be over.

"The county, like Manchester or the other towns, depends partly on grants, on taxes and on other sources of revenue," said Manchester Mayor Elmer C. Lippy Jr. "But, as less comes from the federal government, and less comes from the state, more would have to come from the taxpayer. It could become a serious situation that naturally would affect the preparation of the budget."

Westminster's supervisor of housing and community development is worried by what could be a magnified effect of even the slightest drop in her budget.

"If the city's portion dropped, we would be able to leverage less, get less from our grant sources and it could be potentially devastating," said Karen K. Blanford. "As it is, we can't meet the needs for everyone who needs us now. And we're beginning to see an increase in the number of people who need our services."

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