If the Carroll County government were a family, it might find itself in the following situation:
The roof has a slight leak, but if neglected it could get worse. The kids are growing up and are feeling crowded in their bedrooms. Building another bedroom would alleviate a lot of tension and fighting. The kids would like an increase in their allowances. The family's set of encyclopedia is dated, and a new set would really help the kids in school.
Despite working as much as possible, the family income has not increased at all. With low interest rates, the mortgage was refinanced, saving a few dollars each month in mortgage costs. The family has also borrowed up to the limit of its home equity line of credit. The bank has indicated that until its income increases, the family won't be able to increase its borrowing.
The budget that Carroll's commissioners are assembling for the coming fiscal year, which starts July 1, is much like the budget of our hypothetical family. There don't seem to be any easy answers. Like the family, the commissioners must make some tough choices.
At the moment, the county has a budget that calls for $124 million in spending, about $3.4 million more than the county will collect from all sources of revenues -- taxes, fees, state and federal grants.
And, as with the family, repairs are beginning to catch up with the government.
Due to the tight fiscal situation of the past several years, the
county has fallen behind on road resurfacing. Roads need new asphalt about every 15 years. The county should be resurfacing an average of 60 miles annually, but is struggling to complete half that amount.
While the commissioners acknowledge crowding at Sykesville Middle School, a situation that is going to worsen, they have thrown up their hands and said the county doesn't have the money to begin construction of a new $12 million school at Oklahoma Road. School administrators project that the current "bubble" of elementary students is going to lead to further overcrowding in county middle schools.
Meanwhile, the inmate population at the county jail is at capacity. Plans have been completed for an 80-bed addition. But when the project was put out to bid, the bids were about $1.2 million above the estimated cost. The county can't cover the excess.
The budget for acquiring new books and magazines for the library system has been reduced to half of what it should be. If the trend continues, the libraries will have large gaps in their collections.
Teachers and other school employees have negotiated for 3 percent pay raises. If these employees receive raises, the commissioners are going to be compelled to give raises to the rest of the county employees, who are overdue for a general increase.
By freezing the work force, reducing costs and deferring expenditures, the county has been able to balance its budget during the past three years. That strategy has played itself out. There is not much left to save unless the county begins to take drastic actions, like those being taken in Baltimore County, which is closing libraries and senior centers.
Carroll finance officials, taking advantage of the low interest rates, have refinanced the county's $78 million of outstanding debt. Further refinancings, however, aren't going to result in substantial savings.
Increasing borrowing to meet pressing capital improvements is difficult, too. The county has an AA bond rating that it would like to maintain. Standard and Poor's and Moody's, New York bond rating agencies, have advised the county that borrowing more than $10 million this year might result in a downgrading of the county's debt. A lower rating would result in the county's having to pay higher interest on any new debt.
Revenue growth doesn't look promising either, from the piggyback income or property taxes. The county's income tax revenues had been growing at the rate of 14 percent at the end of the 1980s, but have dropped to 3.3 percent annual growth. Budget Director Steve Powell projects that this year's growth may increase slightly to 4 percent. "It looks like this is a slow recovery, and we aren't going to see 14 percent for some time," he said.
As for the property tax, the county's largest source of revenue, the rate of growth in the assessable base has slowed. The recent reassessment increases in the Hampstead and Manchester areas have averaged about 3 percent. Moreover, the rate of new construction has slowed, meaning that there haven't been many additions to the tax rolls.
The commissioners have said they are not going to raise the property tax rate from its current level of $2.35 per $100 of assessed value, where it has been since fiscal year 1990. The commissioners are toying with the idea of raising the piggyback tax to 52 percent of the state tax, from its current level of 50 percent. Such an increase would generate about $1.4 million annually, but because the tax would kick in halfway through the coming fiscal year, the county would get $700,000 in additional money -- not enough to cover the shortfall.
The commissioners have two months to refine the budget. But their options to reduce expenses further are limited. The one area to examine closely is increasing revenues. The breadwinner of our hypothetical family could take a second job to make ends meet. The commissioners may have to consider raising the property tax to balance their budget.
Brian Sullam is The Baltimore Sun's editorial writer in Carroll County.