Counties face tough times raising revenues to offset cuts Executives can't raise taxes on property until next July.

October 11, 1991|By Larry Carson | Larry Carson,Evening Sun Staff Reporters Bruce Reid, Norris West, Jay Merwin and Monica Norton contributed to this story.

The tough part for county officials trying to cope with the prospect of mounting state budget cuts is they have no way to raise money quickly to fill the gaps.

For them, it's sort of like being the kid who regularly gets $20 a week allowance, and who has invited the love of his life to the movies Saturday night, only to find out on Tuesday that Dad is coughing up only $10 this week.

If any county executive dares to think about raising taxes in this anti-tax political climate, it can't be done legally until next July 1 at the earliest. That won't fill a $20 million hole, in Baltimore County's case, in this year's already tight budget.

The other problem is that the only broad-based major tax over which the counties have control is the controversial property tax. A host of incumbents were washed out of office last fall on a wave of anti-property tax sentiment.

In Baltimore County, each additional penny on the property tax ++ produces $1.3 million in new revenues. Although no official is yet talking about raising taxes, it would take a rate increase of about 16 cents per $100 of assessed value -- meaning about $65 more a year to the average homeowner -- to compensate for state cuts.

Local jurisdictions also have various caps on how much assessments on homes can be increased, on which property taxes are based. But raising the caps, as Howard County Council Chairman C. Vernon Gray has advocated in his county, wouldn't have any effect until July 1 either.

That means that county executives must eat the state cuts by using surpluses, freezing spending, and if that's not enough, laying off workers or dropping programs to get through the fiscal year that runs through June 30, 1992.

"With this reduction, we're looking at a combination [of layoffs and furloughs]," Howard County Executive Charles I. Ecker told grim council members 11 hours after hearing of the governor's plan to trim $4.1 million from his county.

Ecker warned that the county faced a 10 to 15 percent reduction in county government spending. He said some services would have to end, though he didn't say which ones, and that others would be reduced.

County Budget Administrator Raymond S. Wacks said Howard, with 187,000 residents, would be the jurisdiction hit hardest by -- the latest proposal because it is has less than one-third of the population of Baltimore, Montgomery and Prince George's counties, whose reductions were capped at $10 million.

Wacks said state officials need to hear "the devastating impact this is going to have on us." He added, "There seems to be an attitude in Annapolis that local government hasn't done its part."

Some county workers, after being warned by a supervisor about the impending layoffs and furloughs, complained that there's too much fat in the state's bureaucracy and said more cuts should be made there.

Baltimore County Executive Roger B. Hayden is to announce his strategy for dealing with the cuts at a "state-of-the-county" speech scheduled for Tuesday.

He, at least, has an $11 million surplus left from last year to help some, and Harford County had nearly $10 million left over. Howard County, on the other hand, predicted it would have to plug a deficit of at least $10 million to $12 million before next July -- and that was before the state's latest round of proposed cuts.

Larry Klimovitz, Harford County director of administration, confirmed that the county would not see the benefit of any additional revenue collected through new fees, taxes or a rise in the property assessment cap until fiscal 1993, which begins July 1.

"We're going to handle this year's cuts" through across-the-board belt-tightening and the county's $9.8 million surplus, he said. "We're going to spread the pain, just like we have in the past."

Klimovitz said the county is looking to impose a $50 to $60 per ton fee on trash taken to its incinerator beginning in January, which could raise about $3 million by the end of the fiscal year. In turn, private haulers could raise their rates.

Anne Arundel County Executive Robert R. Neall may have had an advantage over his counterparts early on, but that advantage may have done more harm than good.

Neall, who instituted hiring freezes and was able to convince county unions to go without raises, so far has been able to avoid layoffs in the county. In fact, the county last week made big news by offering to hire 12 of the state troopers who were slated to lose their jobs under the budget ax.

But, instead of showing gratitude that Neall was willing to rescue some troopers' jobs, state lawmakers took it as a sign that more could be squeezed from the locals. For Anne Arundel, the state has recommended an additional $7.9 million in cuts for a total reduction of $17.4 million in state money.

"It's unlikely we can absorb that kind of a cut without it affecting personnel," said Louise Hayman, a spokeswoman for Neall. "It could be in the form of wage concessions. It could be layoffs."

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