Hayden objects to plan to cut local aid, urging state reforms first

October 17, 1992|By Larry Carson | Larry Carson,Staff Writer Marina Sarris of the Annapolis Bureau contributed to this article.

Baltimore County Executive Roger B. Hayden abandoned his low-key profile yesterday and promised to fight a State House plan to cut $147 million in aid to local governments unless the state gets its own financial house in order.

"Our people cannot be satisfied with going through this fire drill every year," the usually reticent Mr. Hayden said of this second round of midyear cuts in the state budget. "We cannot just take this large wound and Band-Aid it."

After firing off a letter of protest to Gov. William Donald Schaefer yesterday, Mr. Hayden met with leaders of the county's delegation in the House and Senate in an effort to get them to oppose the plan.

Mr. Hayden said he wanted assurances that the cuts Mr. Schaefer and legislative leaders are proposing to deal with a $450 million state deficit aren't just stop-gap measures that would only postpone the problem until next year.

Page Boinest, acting spokeswoman for the governor, responded to Mr. Hayden's letter, saying, "This [cut] is very much intended to be a permanent cut in state expenditures. This is part of the state solving its deficit problem."

In Annapolis, meanwhile, legislative leaders tried to sweeten the deal by offering local governments something they've never had: the power to raise piggyback income taxes in midyear to offset cuts in state aid.

Baltimore Mayor Kurt L. Schmoke said he'd consider asking the City Council to raise the local income tax rate from 50 percent to 60 percent of the state tax rate to help make up for the $18.8 million cut the city would receive under the budget-balancing plan. But the deadline for doing so under current law passed this summer.

"If we're going to do this [budget cut] and Schmoke needs this flexibility in Baltimore City, I'm certain the General Assembly would be more than willing to grant him that courtesy," Senate President Thomas V. Mike Miller Jr., D-Prince George's, said yesterday.

If introduced, that bill could be passed when the legislature meets in a special session tentatively scheduled for Nov. 9.

Baltimore County already has raised its income tax rate to 55 percent of the state tax. Mr. Hayden said he hadn't decided whether to ask for a second increase in the piggyback tax.

The plan, disclosed earlier this week, would end the state's long-standing assumption of Social Security payroll taxes for teachers, librarians and community college professors.

It would cost Baltimore County $19.1 million, bringing this year's state cuts to $25.6 million.

If the county were to raise its property tax to make up that amount, it would represent about 18 cents on the current rate of $2.865 per $100 of assessed value. That amounts to $72 in taxes on a home a home valued at $100,000.

The cuts this year would be slightly larger than the $24 million the county raised by increasing its piggyback income tax rate to 55 percent July 1.

That move resulted in a $68 increase in taxes for a county resident with the 1990 median county gross income of $38,837, according to county budget analysts.

In his letter, Mr. Hayden listed six conditions that he and leaders of Maryland's other large jurisdictions were asking as a condition of their support.

* No more state mandates imposed on local governments without funding included. Mr. Hayden attached a 23-page list of existing mandates.

* No expensive new state programs for the next two budget years.

* No state restrictions on local revenue sources.

* Local control of agencies, such as circuit courts and election boards, which local governments pay for.

* A guarantee that any new state budget shortfalls will not result in more local government cuts for the next two years.

Mr. Hayden called the absence of those principles in the State House plan "most disheartening."

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