Rewriting The Rules On Budgets

Spending Advisory Panel Views Large Surpluses Dimly

March 10, 1991|By Samuel Goldreich | Samuel Goldreich,Staff writer

A county advisory panel is drafting formulas to limit annual budget surpluses, capital spending and long-term debt to relieve the burden on Anne Arundel taxpayers.

The recommendations of the Spending Affordability Committee could allow a 1992 operating budget $21 million to $27 million larger than this year's $617 million figure.

The committee, which has a report due Friday, was created by voters last year to advise the county executive, County Council and Office of the Budget.

The report will probably urge that any surpluses be committed to the following year's budget, ending the practice of fourth-quarter appropriations under former Executive O. James Lighthizer, chairman Bennett Shaver said.

"If the committee's recommendations for appropriations are going to have any meaning, I think logic implies that if there is any surplus above authorizations, it be rolled over to the next year," he said yesterday.

Shaver, former director of the $10 billion Maryland Retirement Systems, said the committeewould defer until next year consideration of whether surpluses should be explicitly recognized in the budget process and be mandated by charter to protect the county's bond rating.

The county began deliberately planning budget surpluses in 1983, after Lighthizer took steps to avoid deficits like those he inherited from his predecessor, Robert Pascal. Wall Street bond-raters said that the county should maintain a 3 percent to 5 percent surplus to ensure that its debts are covered in hard times.

County Executive Robert R. Neall faces hard times this year, with revenue slowing in growth or actually declining. This year's anticipated $17 million surplus, 2.8 percent of the budget, compares with almost $40 million in fiscal 1990.

But administration officials have told the committee that the surplus carried into fiscal 1992, which starts July 1, will be in the 2 percent to 2.5 percent range.

"We think there should be some surplus," said committee member Daniel Klosterman, an accountant and former assistant countyauditor, "but we don't want to see a repeat in the $60 million to $70 million range."

Under Lighthizer, the county entered fiscal 1990with a 12 percent ($67.5 million) surplus and spent $47.8 million tofinance roads, school and other capital construction projects.

County officials continue to defend planned surpluses, noting that the previous administration saved $50 million in interest payments by adopting a pay-as-you-go system for capital projects.

But committee members have questioned the practice of making taxpayers cover the costs up front for services that will be enjoyed for 30 years.

"As a committee member and a citizen, I don't know if that's a viable answer," Shaver said. "I guess I saw the sausage being made too many timesat the state level. Sooner or later, somebody wants to spend it."

The committee has been considering tying county spending to growth in total personal income, following Neall's election platform during his campaign for executive.

Shaver said that panel members have notdecided whether taxpayers can afford an operating budget exceeding $600 million. But he noted that the tax burden as a percentage of income has held steady for the past decade.

"If the county's been appropriating 5.3 percent to 5.7 percent (of total personal income) the last 10 years, it's hard to say it's not affordable," he said.

Klosterman estimated that a similar tax level in 1992 would pay for a budget between $638 million and $644 million.

Although Neall has ordered department heads to submit no-growth budgets, county officials have used $642 million as a planning figure to pay for $7.5 million in merit and longevity raises and other mandated spending next year.

A temporary spending advisory committee created by the council last year also recommended a budget very close to Lighthizer's proposal.

The committee has been working quietly since Jan. 31. So quietly, infact, that its meetings have passed unnoticed by the council, its auditor and the news media.

"They might have informed us as a courtesy, but I don't have any real problem with that," assistant county auditor Bruce Emge said.

Committee staff member Steve Feinstein, an executive assistant to Neall, neglected to make the panel's schedule public, leading to a confrontation with an Anne Arundel County Sun reporter Thursday night in Annapolis.

The reporter was barred from ameeting that had been closed to discuss the committee's draft report, and Feinstein asked an Arundel Center guard to make certain that the reporter got on the elevator to leave.

When the reporter protested that he did not know the meeting of the public body was closed, Feinstein replied, "You didn't call ahead to ask to attend."

Although the council's spending committee opened its working sessions to reporters last year, County Attorney Stephen Beard said yesterday that the new panel is an independent body that can close sessions for "compelling" reasons under the state open meetings law.

Feinstein, who is new to county government, apologized for his oversight concerning public notice Friday.

"Some of us still can't find the bathrooms around here, much less understand the open meetings law," he said.

Shaver said the committee's job has also been complicated by its tight deadline, which the council extended by six weeks.

In the comingyear, he said, the panel will closely examine county agencies that have independent sources of revenue.

"I don't think we're really too interested in going department by department," he said. "But the Board of Education (and the Department of Utilities) is a special problem because the county has less control."

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