Tax Increase Possible, Ecker Warns

Executive's Financial Advisory Panel Delivers Bleak News In Report

February 12, 1992|By James M. Coram | James M. Coram,Staff writer

After hearing bleak news from a group of financial advisers Monday, County Executive Charles I. Ecker said he cannot rule out a tax increase for the coming year.

Ecker's 11-member financial advisory committee told him to expect no more than $264 million in revenue for fiscal 1993 and to use extraordinary caution in making spending commitments above that level.

The committee's projection is $7 million more than the administration expects to receive in the current fiscal year, but $11 million less than the committee forecast a year ago.

Increased revenues, ifcoming, would be due to increased population rather than an improvement in the economy, the committee warned Ecker in a six-page report.

"I was told a realistic projection last year was $275 million," Ecker said. The county instead suffered a deficit of $18.5 million. "I hope the new revenue estimate is conservative enough," Ecker said.

Ecker said the dour report means he will have to continue to defer spending on things like new police cars. The county has not replaced vehicles for two years.

On the other hand, Ecker said he hopes to provide some pay increase to county employees within the dollars projected. Not only were no raises given in the current budget, but countyemployees were furloughed five days without pay. The furlough amounted to a 2 percent pay cut.

State forecasters predict a 6 percent increase in piggy-back tax revenue -- local income taxes collected by the state and distributed to the county at a rate of 50 percent of the state tax -- but that forecast reflects unfounded optimism, the committee said. What will happen instead, the committee believes, is that the personal income of Howard County residents will remain steady or decline slightly.

Ecker said he supports an omnibus bill before the General Assembly that would give counties greater flexibility in raising revenues. One of the provisions would allow counties to increase the piggy-back tax to 60 percent.

"The property tax needs somerelief," Ecker said. "We need other options."

The committee called for a moratorium on discretionary spending, using the county's agricultural land preservation program as an example, until the county's economic situation becomes clearer.

The committee also suggested that the county find out what it would cost in penalties to ignore state and federal requirements if money to meet those requirements is not provided. The county should first ask appropriate agencies to waivetheir requirements until funding is restored or the requirements modified or repealed, the committee said.

The committee recommended that the county look at changing fees for services, increasing employees' share in the cost of benefits and having certain government services taken over by private industry.

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