Carroll's Revenue Engine Sputters CARROLL COUNTY

May 11, 1993

The engine that powers Carroll County government revenues is slowing, which spells trouble for the county's efforts to provide services for a growing population. The power train is the county's assessable base of real property, which is worth about $2.85 billion.

If the recent assessments are any indication, the county's major source of revenue will be stalled for the next few years. The annual double digit increases in the value of the county's real property -- so common in the 1980s -- are history, of course. Triennial assessments for the Hampstead and Manchester area of the county are up about 3 percent, compared to a 10 percent increase in the last cycle. County finance officials had expected increases of about 6 percent. Projections of 7 or 8 percent increases for next year have been halved.

These lower assessments ultimately result in a leveling of real estate tax collections, particularly if the commissioners continue to maintain the rate of $2.35 per $100 of assessed value. Because real estate taxes provide half of the county's total revenues, slowing in those collections will guarantee austere county budgets featuring cutbacks in programs and services.

New residential development and rising prices fueled the rapid growth in real property assessments during the past decade. With low inflation, home prices may barely increase. While residential development will continue and add marginally to the tax base, new residents usually require services -- education being the major one -- that consume more revenue than these residences produce in taxes.

The way to escape this cycle is for the county to make a focused effort to attract new commercial and business development. Business development more than pays for itself.

Harford County, which has experienced population growth comparable to Carroll's, finds itself in a better fiscal position thanks to a spurt of industrial development. Its assessable base rose about 6 percent.

The first step in solving Carroll's problem would be to hire a full-time economic development director. Developing a coherent economic development policy would be the second step. Only when economic development becomes a county priority will Carroll's sputtering engine start humming.

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