Neall irked by council budget Plan offers raises and 8 tax cut

June 01, 1993|By John Rivera | John Rivera,Staff Writer

Depending on your point of view, the $663 million budget approved Thursday night by the Anne Arundel County Council is either a piece of fiscal wizardry or an irresponsible drain on the county's coffers that will affect revenue for years to come.

County Executive Robert R. Neall takes the latter interpretation. The combination of an 8 cent drop in the property tax rate -- 4 cents below Mr. Neall's proposal -- and the money the council designated for 3 percent salary increases for county employees puts his government in a precarious position, he said.

"They have significantly weakened our situation of where we were at noon today," an angry Mr. Neall said Thursday night as he stalked out of the Arundel Center.

But for the four-member bloc that supported County Auditor Joseph H. Novotny's $5.7 million in budget cuts that made both the raises and the tax cut possible, it was pure poetry.

"I think he was brilliant," said Councilwoman Maureen Lamb, D-Annapolis. "He knew what the council wanted, and he found a way to do it."

Mr. Neall argues that the council's tinkering with the $668.6 million spending plan he proposed actually doomed raises he intended eventually to give employees. On Thursday morning, he sent them a letter stating his intention to consider a pay raise for employees on Jan. 1 after evaluating the financial picture in the first quarter of the fiscal year.

Although the council freed the money for the county employees' raises, it is still up to Mr. Neall to designate the money for that purpose.

The pay increase for teachers must be granted by the school board.

Council Chairman David G. Boschert argues that the council freed the money, which was placed in a contingency fund, to give Mr. Neall the option to offer the very raise he told the council he was considering.

L Of even more concern is the long-term effect of the tax cut.

By lowering the tax rate from $2.46 per $100 of assessed value to $2.38, and the Annapolis tax rate from $1.31 to $1.15, the county will lose $10 million in revenue in fiscal 1994.

But in November, voters passed a charter amendment that limits the increase in property tax revenue the county can collect each year to the rate of inflation or 4.5 percent, whichever is less. Mr. Neall only intended to lower the tax rate by 4 cents to fall under the cap because he also limited home assessment in creases to 4 percent.

Lowering the tax rate another four cents will cost the county about $5.5 million, money that budget officials said is gone forever, because the tax cap will be calculated on the smaller tax base.

Added to that are the pay increases, which, if granted, would become a permanent expenditure.

"So you're building in a permanent loss of revenue on the one hand, and you're building in a permanent expenditure in the budget because of salaries," said Budget Officer Steven Welkos. "It could be kind of difficult."

But Mr. Neall, who prides himself on his fiscal management skills, said he'll manage.

The big winners in the budget battle -- besides employees -- may have been North County residents, who saw the long-awaited renovations to Andover Middle School approved at the last minute.

But they came at the expense of Solley Elementary School, which has $1.6 million in state funding lined up.

A day after the school was cut from the capital budget, Councilman Carl G. Holland, who also lost funding for the Mountain Road Library in his district, was still fuming.

"What galled me more than anything was they took money out of Solley Road Elementary to pay for these pay increases," he said, referring to $2 million from the general fund that was earmarked for the project.

Mr. Holland accused his colleagues of playing to the employee unions, especially the Teachers Association of Anne Arundel County, in granting the raises.

But Ms. Lamb said she didn't know what Mr. Holland was complaining about. "We all lost a lot and we all got something," she said. "Look at what happened to me. I'm stuck with something forever," she said, referring to the first phase of a $71 million expansion of the detention center near Annapolis that the council approved.

Mr. Holland said he was not giving up on Solley.

"I am going to do everything in my power to make sure Solley moves forward," he said.

The fat lady, he added, has yet to sing.

"She was humming last night, but she hasn't burst out into song," he said. "And I'm going to put a muzzle on her."

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