Neall Wants To Sock Away Money For Future Fiscal Rainy Days

February 23, 1992|By John A. Morris | John A. Morris,Staff writer

County Executive Robert R. Neall wants permission to create a "rainyday" fund to help Anne Arundel County weather future recessions.

"If the current recession has taught us anything, it's that the localgovernments have to have a hedge against a downturn," Neall told state delegates from Anne Arundel County Friday.

At Neall's request, Del. John Gary, a Republican from Millersville, has introduced legislation that would allow Baltimore, Anne Arundel and others counties to set aside money to guard against lean budgetyears.

Like other counties wrestling with the recession, Anne Arundel has struggled to balance its books since Neall introduced a $616million budget -- a spending plan that was less than the previous year's -- last spring. Since then, reductions in state aid to the county have required Neall to cut $18 million. He expects to have to make additional cuts if Maryland lawmakers further reduce state aid duringthis legislative session.

The county would use its rainy day fundlike "a passbook savings account," building up the balance during prosperous years and drawing it down when revenue falls short, Neall said.

Neall said he wants the county to set aside $15 million to $20million. The bill would allow each county to decide the size of its fund.

Neall is not the first county executive who wished he had a cash reserve to cope with a budget crisis.

Howard County ExecutiveCharles I. Ecker began seeking authority to create a rainy day fund for his county last year. The state constitution does not allow counties to set aside reserves, though the state government set up a rainyday fund in 1985.

Beverly Wilhide, assistant to Ecker, said Howard County is asking voters to authorize the creation of a reserve account in a November referendum. Gary's bill may make that referendum unnecessary, she said.

"Just like many businesses do now, you need to put a little money aside that would be used for a sudden downturn, a public works disaster or some other sudden need for funds," Wilhidesaid.

The Anne Arundel delegation unanimously endorsed the bill, which will be heard by the House Constitutional and Administrative Law Committee next month.

"Everybody should have a rainy day fund," said Del. W. Ray Huff, a Pasadena Democrat. "If I didn't have my own rainy day fund, I would be in trouble myself."

Del. Marsha Perry, a Crofton Democrat, asked Neall what guarantees taxpayers would have that the rainy day fund would not become a political slush fund.

Neall said safeguards would be taken to limit access.

"The money would be deposited into an account very much like a safety deposit box with two keys," he said. To use the money, "the county executive would have to declare an emergency and the County Council would have to approve the withdrawal," he said.

Neall said he also plans to propose an amendment to the County Charter, which would have to go to a voter referendum, to allow the county to create a rainy day fund.

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