Tax shortfall generates talk of an audit in Howard

November 27, 1990|By Norris P. West | Norris P. West,Evening Sun Staff

News that the shortfall in Howard County revenues is projected to reach $18 million has prompted the transition team of Charles I. Ecker, the county executive-elect, to consider conducting a financial audit of each government department.

Attorney Michael Davis, co-chairman of the Ecker transition team, said yesterday that Ecker probably will decide by the end of this week whether to spend $47,000 for an audit that would provide detailed information on the county's fiscal status.

County Budget Officer Raymond Wacks said income tax revenues appear to be $7 million below projections, which could boost the total shortfall to $17 or $18 million by the end of the fiscal year on June 30, 1991.

Previously, he said the gap would probably exceed $10 million because revenues from transfer taxes and recordation fees had fallen sharply. The income tax projections -- the local share of the state piggyback tax -- were taken from federal withholding taxes in July, August and September.

Wacks said Howard's budgetary problems are identical to those facing other jurisdictions in the region that are being hurt by the sluggish economy.

Davis said an audit may be necessary to determine exactly where Howard's fiscal problems lie. However, he said, it may be difficult to justify spending the money for such an analysis because it would take three months to complete.

"We're evaluating that option," he said. "It's not something we want to jump into. We need to know exactly where we are with the budget. We just need to know whether we can find that out without an audit."

Ecker has said he may have to raise taxes and make cuts in the county's $286.4 million budget to avoid a deficit. He also has said the county's public schools, which get more than half of the county's operating expenses, would have to absorb its fair share of cuts.

Davis said Ecker and the transition team will try to figure out which areas of government can be trimmed. He noted that it is illegal for a governmental jurisdiction to operate under a deficit and that officials are seeking clarification of that statute from the county law department.

"I think we've gotten left with a real squeeze play," said Darrel Drown, R-2nd, a councilman-elect, charging that the shortfall demonstrates that the outgoing administration of County Executive Elizabeth Bobo has made poor budget decisions.

"We're going to have to look at major major cuts," Drown said. "Eighteen million dollars is going to be difficult to make up."

Councilman Paul Farragut, D-4th, noted that previous shortfall projections forced the county to impose a temporary hiring freeze and restrict travel by its employees.

"We've done the easy things so far," Farragut said, adding that JTC far deeper cuts would have to be made to avoid a significant tax increase.

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