Baltimore Co. executive decides to be 'upfront,' tell surplus size Hayden discloses an expected $10.8 million surplus, is wary of council.

April 23, 1991|By Larry Carson | Larry Carson,Evening Sun Staff

In his recent budget, Roger B. Hayden took one small step that no other recent Baltimore County executive has been willing to take.

He disclosed, in writing, that the county expects to have $10.8 million left on June 30 when the books are closed on the current fiscal year.

Executives in the past have been loath to include that carryover figure in the budget, lest the council decide to use it to reduce taxes.

To a newly elected County Council eager to cut taxes, that $10.8 million could be a tantalizing figure. If all of that money were used to reduce the tax rate, it would lop off another 8 cents on top of a 2-cent cut Hayden has already proposed.

That would give county property owners, who now have a tax rate of $2.895 per $100 of assessed value, a tax rate of $2.795.

That would be just 2.5 cents above the $2.77 figure that at least one councilman, Donald C. Mason, D-7th, is seeking to meet the state's constant yield level. At that rate, the county would receive no more revenue from property taxes than it did last year despite any increase it receives from rising assessments.

County councils in past years have chafed at having to guess at the eventual end-of-year surplus and have, for example, cut funds allocated for such things as storm emergencies and trash disposal knowing that the expenses could be made up from surplus money.

Then-Executive Donald P. Hutchinson was accused of "overtaxing" in 1984 when he proposed a 24-cent property tax rate increase and the county later turned up with an $18.5 million surplus, $8 million more than expected. The rate eventually rose 13.5 cents after council cuts.

Hayden, according to Budget Director Fred Homan, has decided to be "up front" with his council and disclose the county's best guess on the eventual surplus in his $1.1 billion fiscal year 1992 budget. He has also allotted $1.2 million for storm emergencies, mostly snow removal, much more than in past years, in the hope the council will resist the temptation to squeeze another penny off the tax rate and leave that money alone.

"We're not hiding anything," Hayden said of his decision to disclose the expected surplus.

He said he doubts that this council would use any of the money for anything but the intended purpose. If the council does use the surplus, Homan and Finance Director James Gibson said, it could harm the county's bond rating and cost the county millions more to borrow money through bond sales in years to come.

Gibson said the county was to sell $100 million worth of bonds today to finance new county buildings and roads, water and sewer projects. The two major New York bond rating houses, Moody's Investors Service Inc. and Standard & Poor's Corp., just reaffirmed the county's top-level bond ratings.

Homan said that an unspent surplus of $10.8 million for a county spending $1.1 billion is too small anyway. "The county has to have a fund balance," he said.

The council has until June 1 to make any cuts and set a new property tax rate. The legislative body may only cut Hayden's budget. It may not add any expenses.

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