Things Are Bad, Getting Worse, So Let's Look At Raising Taxes


October 13, 1991|By Mark Guidera

In the early spring I posed this question to the new county executive, Eileen M. Rehrmann: "Why don't you raise the property tax?"

I had been watching the reports that showed building activity in the county going off into a deep crevice, the state sales tax reports that showed a 10-fathom plummet. I looked over the horizon and saw no savior coming up the mountain to bring millions in property and income taxes.

The writing was on the wall -- in bright red ink.

Of course, Rehrmann gave the answer that has become as customary for Democrats asit has been for Republicans: There is no need to raise taxes. Two ofher top two advisers -- Jim Jewell, the treasurer, and Larry Klimovitz, the director of administration -- nodded in agreement.

These are fine, upstanding men. But I was amazed they could not utter the words either, the words they will have to say soon enough: higher taxes.

I pressed on with the executive. "The good times are over, and the state will not have as much money to give you as it has in the past. Your revenues are shrinking. The building boom is over. Is raisingproperty taxes all that bad? There hasn't been a tax hike here in years. Isn't it a little preventive medicine?"

And then I posed this: "If you can't bear to raise property taxes, how about proposing other forms of taxation? A school tax to help pay for all these schools the county needs? A fire tax to cover the cost of equipping the volunteer fire departments? That would shave the load."

"No," "No," "No," came the answers like a drumbeat.

Then the plans for the big shell came at me. They were cutting hiring to a minimum. They were delaying some big-ticket projects. They were slicing out raises for employees. They would save millions and build up a reserve fund to show the bond houses in New York so they could borrow money. The weather would not be too bad.

Of course, as we all know and the governor warned us long ago, the storm has made land and is taking no survivors.

The nagging voice in my head as I left the meeting that day said this, "They should raise property taxes now."

Rehrmann and Klimovitzare saying they did the right thing by making the trims to the budget back in the spring. Harford will weather the state's cuts better than most counties as a result.

But let's be honest. The cuts in thecounty budget were not made because the state was about to belly-flop into a financial quicksand. They were made to build the reserve fund for the bond rating.

It's too late to raise property taxes for this budget year, which began July 1.

But the state's budget outlook is much darker next year and the cuts in state aid to Harford County will be deeper. So it's time to start talking seriously about raising property taxes now.

There is talk of raising the property assessment cap from 6 percent to 10 percent, and there is talk of raising fees charged for everything from a building permit to a vendor's license.

But raising the property assessment cap isn't the best way toraise the revenues needed. For one, how many homes realize a real appreciation value of 10 percent? And raising the cap won't bring in even $1 million.

The quickest way for the county to generate the revenues needed to keep the system from collapsing into a state of disarray is to hike the property tax rate. It spreads the pain among us swiftly and fairly.

Harford's property tax rate has stood at $2.73 per $100 of assessed value since 1983. That was the year former CountyExecutive Habern W. Freeman Jr. raised it 18 cents. He never proposed raising it again. He didn't have to. The boom years were about to begin. The county and state would be flush with the new money for years.

The wrenching question, of course, is, How much should the property tax rate be raised?

Well, let's play our own shell game for aminute to decide.

Keep this in mind as we play: If you raise the property tax rate in Harford by a penny, you bring in an added $305,000 in revenue.

The state cuts to Harford County's operating budgetalone are projected at about $6 million. An educated guess would tell us that there could be about $2 million more in fat in the county budget: jobs that are redundant, office equipment and other purchases not needed.

So we need $4 million more in revenues to keep a lean,effective government operating that provides us the services to which we are accustomed. That's 16 cents added to the tax rate, which bumps it to $2.89.

Then there are the cuts in state aid to education,including the community colleges, direct aid cuts to community service programs and a massive cut to the Health Department that could result in layoffs. The tally for these for just this year -- and next year will be worse, we are told -- is almost $1.2 million after effortsto trim costs to the bone.

If Harford government wanted to cover those cuts it would need another 4 or 5 cents on the property tax rate. So we are looking at another 20 cents or so on the property tax rate if the county government wants to weather this storm and the more brutal battering headed this way next fiscal year.

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