Fiscal Flexibility in D.C. Suburbs

May 05, 1992

Suburban Washington voters are about to discover what it costs to run local government. Montgomery County Executive Neal Potter is pushing for a broad, soup to nuts tax package worth $100 million. In Prince George's, County Executive Parris Glendening is counting on a 20 percent hike in the piggyback income tax to help pay for a $70 million jump in current spending.

There are large and small differences between these two approaches related to demographics and voter expectations. But both signal a swing away from the Spartan penny-pinching of the past two years. The trend is most striking in Montgomery, where Mr. Potter is betting that people are willing to keep afloat an expansive raft of civil services. "It's a county that takes a perverse pride in the quality of life," said Edmond F. Rovner, a former top aide to Mr. Potter's predecessors.

The county executive is depending on it. To make his $1.63 billion budget work, he's asking residents to shoulder a 20 percent hike in the local income tax, higher levies on real estate transfers and an extension of an energy tax that was supposed to expire in June. This would spare most, though not all, services from the chopping block and provide much-needed money for a school system facing an influx of 4,000 kids this fall.

Prince George's, too, is eyeing higher taxes as a fiscal stimulant. Mr. Glendening's scheme to ratchet up the county's income tax to 60 percent of the state tax -- worth about $35 million -- would funnel dollars to education and public safety and protect county workers from layoffs. Critics have assailed both plans on the grounds that government needs to be whittled down and waste eliminated before sticking it to taxpayers. The county council is split on the issue.

The trouble with lean, mean government is people can never seem to agree on when the bureaucracy has slimmed down enough to look good. What's going on in Montgomery, and to a lesser extent in Prince George's, is less about raising taxes than an extraordinary change in thinking about how local services get paid for.

In the '80s, suburban government purses were filled largely through booming growth. The boom has disappeared, and local governments are left with a lifestyle few can support. Montgomery's "market driven" approach could be the answer for Howard, Baltimore and other wealthier Maryland subdivisions. If taxpayers are willing to pay for a costlier local government, why not let them? If nothing else, it might keep the haves out of line for state aid, leaving more for the have nots.

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