Shortfall Makes Tax Increases Probable, Ecker Says Next Year's Deficit Is Now Projected To Reach $25 Million

November 28, 1990|By James M. Coram | James M. Coram,Staff writer

County Executive-elect Charles I. Ecker said yesterday the county will probably need a tax increase to deal with a projected $25 million shortfall in next year's budget.

"I have no idea of the magnitude of the increase, if any," Ecker said, but "I would hope 25 cents would be too high."

The current property tax rate is $2.45 per $100 of assessed value and is one of the lowest in the region.

Preliminary projections for next year indicate that one cent on the tax rate would amount to $500,000. In order to cover all of the shortfall Ecker expects, the tax rate would have to be increased 50 cents. Ecker said such an increase definitely would not happen.

Ecker based his projections on word given him last week that this year's revenue would be $17 million to $18 million less than anticipated. Since "this year began with a surplus, next year will be even worse," Ecker said.

Ecker reminded a group of senior citizens yesterday that he had said during the campaign that finances and the specter of a tax increase was a "bigger issue than growth."

Then, however, the county was projecting only a $3 million to $5 million shortfall. What has changed in the three weeks since is that the county now knows the income tax revenue it will be receiving for the months of July, August and September. That revenue is $8 million less than expected.

The county did not learn of the shortfall until last week when the state notified budget director Raymond S. Wacks of the amount the county would be receiving.

The other shortfalls the county is now anticipating, Wacks said, include $3 million in building licenses and permits, $3 million in recordation tax, and $3 million in building permits, zoning fees and electrical permits.

"If (prior administrations) had done what I wanted (and used the millions of dollars in budget surpluses each year to reduce the county's long-term debt), we would not have this problem," Ecker said.

Despite the anticipated loss in revenue, Ecker, in his first public address since the election, told the Senior Advocates of Howard County that he still favors a proposal to limit property assessment increases to 5 percent annually.

Two bills designed to do just that will be introduced at Monday's County Council meeting.

Ecker said he hopes to be able to meet this year's budget and plan for next year's by paring expenses.

As for this year, Ecker said he hopes he can get through it without any layoffs. He said 88 positions currently vacant are "frozen" and will not be filled.

Other than that, Ecker said he didn't know how he would go about making the budget reductions necessary to achieve a balanced budget at year's end as the county charter mandates.

"We're going to have to set priorities and determine the amount of taxes we can ask people to pay," Ecker said. "Hopefully, we won't have to cut services. But something's going to to have to go."

Budget administrator Wacks, asked to compare the county's financial health to that of a patient in the hospital, said the county still has a healthy revenue base that could deteriorate if conditions worsen appreciably. "Right now, the patient has a bad cold," he said. "He's not critical, he's not dying. But the cold could develop into flu."

The thought of raising taxes, losing services or both was not what Ecker's audience of about 85 seniors gathered at the Florence Bain Center in Columbia yesterday wanted to hear.

The first senior to speak told Ecker he had seen a 44 percent increase in property taxes, and that unless Ecker provided a "money allowance" or a reduced assessment for seniors, he would probably have to leave the county.

Another said he was concerned about anticipated budget cuts of 7.5 percent in the office on aging. He hoped Ecker would spare that department.

One man asked Ecker if he was aware that it was the raising of property taxes that contributed to County Executive Elizabeth Bobo's defeat. His apparent implication: raise taxes and the same thing could happen to you.

Ecker never flinched. "You cannot have services without money," he said.

"I'm not ruling out a tax increase. There is a probability." Afterward he said privately he hoped the probability would be only a possibility.

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