County officials expecting cuts in state grants

August 23, 1991|By C. Fraser Smith | C. Fraser Smith,Annapolis Bureau of The Sun

ANNAPOLIS -- Like battle-weary soldiers on their way to another front, county officials gather in Ocean City today to swap budget-cutting horror stories and to learn if they will lose another $97 million in grants from the state.

Now facing a deficit of at least $300 million, Schaefer administration officials are considering cuts in a program that sends individual county governments up to $25 million from a 21-cent state property tax.

"It certainly is one of the areas we're looking at," says James Rowland, a spokesman for the state budget office. Other administration officials confirm that the local tax grants are among the expenditures on the budget-cutting block.

At the first official session of its three-day convention, the Maryland Association of Counties will discuss "Fiscal Issues for Federal, State and Local Governments." U.S. Representative Benjamin L. Cardin, D-Md.-3rd; state Sen. Laurence Levitan, D-Montgomery; and Anne Arundel County Executive Robert R. Neall -- all experts on government finance -- are on the panel.

Gov. William Donald Schaefer is scheduled to address the convention tomorrow, and his aides say government finance will almost certainly be part of his message. Mr. Schaefer is likely to remind the county officials of their opposition to a major tax increase he proposed last year.

Though administration officials said the governor is still weighing his options for cutting programs or raising revenue, Mr. Schaefer will have his own budget-cutting war stories for the county leaders.

Budget Secretary Charles L. Benton Jr. told the Board of Public Works last week that entire programs almost certainly will disappear this year. An assortment of state officials say layoffs in the state work force, avoided for the most part up to now, are virtually inevitable. Mr. Schaefer also reportedly is considering a special session for November to ask for additional taxes.

County officials will be pressing the governor and his aides for information on what form the state cuts will take: whether, for example, the state will cut aid to education or police aid or simply take part or all of the $97 million tax-grant program.

This program has considerable appeal for local officials because it comes in the form of a flexible grant that can be used at local discretion.

That a substantial "hit" is coming, however, seemed to be an accepted fact. While the state has cut about $660 million over the past year or so, local governments have absorbed only about $20 million of that. Now, with its deficits still growing, the state has nowhere else to turn, several county officials conceded.

While the state government has balanced its budget by raiding funds for parkland, industrial development or highway construction, cuts made by county officials tend to land on school books, jobs and fire-fighting equipment.

"State government has been through significant amounts of hell," says Dennis F. Parkinson, a former state budget officer and now Mr. Neall's budget director, "but local government is where the rubber hits the road."

The city of Baltimore would have to add about 9.5 cents to its $5.90-per-$100 property tax rate -- by far the highest in the state -- to replace the $7.8 million it stands to lose.

Anne Arundel officials have been ordered to devise a plan for lopping $10 million from the $616 million budget. At least $5 million of this would come from the school department, which accounts for more than half the county's spending.

The $10 million target set by County Executive Neall is slightly higher than the $9,209,000 the county is scheduled to get from the state under the property tax grant program. To replace that $10 million by raising taxes would mean adding about 10 cents to the county's $2.45 per $100 tax rate -- an option Mr. Neall has ruled out.

"Obviously, the state has a problem," says Raymond S. Wacks, the Howard County budget director. "They have to do something. We hope its soon."

Mr. Wacks says his budget is already 5.5 percent less than last year's. Forty of the 1,800 employees have been laid off, and the county is borrowing to cover a shortfall of up to $3 million for last year.

Mr. Neall says prudence compels him to plan for less money than the state promised this year.

"If we begin planning now, we will be well positioned to face our share of any bad news that comes from the State House."

County grants

The following is a list of the grants the counties were to receive in the current fiscal year from the state's 21-cent property tax. The Schaefer administration is considering cutting these grants as it addresses its $300 million budget deficit.

Allegany. . . . . . ..$723,000

Anne Arundel. . . . $9,209,000

Baltimore City. . . 7,807,000

Baltimore Co.. . . 12,916,000

Calvert. . . . . . . 1,196,000

Caroline. . . . . . . 341,000

Carroll. . . . . . . 2,304,000

Charles. . . . . . . 1,743,000

Cecil. . . . . . . . 1,193,000

Dorchester. . . . . . 472,000

Frederick. . . . . . 3,098,000

Garrett. . . . . . . . 537,000

Harford. . . . . . . 2,971,000

Howard. . . . . . . 5,140,000

Kent. . . . . . . . . 402,000

Montgomery. . . . . 25,864,000

Prince George's. . 13,261,000

Queen Anne's. . . 798,000

St. Mary's. . . 1,235,000

Somerset. . . . . 253,000

Talbot. . . . . 1,080,000

Washington. . . 1,689,000

Wicomico. . . . 1,074,000

Worcester. . . . 2,045,000

Source: Budget Highlights for Fiscal Year 1992

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