Tax Cuts, Pay Raises and Politics ANNE ARUNDEL COUNTY

June 08, 1993

The county government budget season just ended was enough to sour ordinary people on politics for good. The Anne Arundel County Council pandered, County Executive Robert T. Neall pouted and everybody shouted at one another. It was not pretty.

Most important, the $663 million spending plan that evolved out of this bickering spells trouble for the future. This is primarily the fault of the council, which lowered the property tax rate by 8 cents in the face of a voter-approved tax cap that will compound the revenue loss from year to year. Budget officials figure the county will lose $197 million by 1999, $38 million more than under Mr. Neall's plan for a 4-cent cut. (Incidentally, County Auditor Joseph Novotny, who recommended the 8-cent cut, agrees with those projections.)

How much of that money the county can do without is certainly arguable. Still, such large losses leave little doubt that the ... TC government will have a hard time keeping up with demand for schools, police, etc. The county also could lose its bond rating, costing millions of dollars more in higher interest rates when it borrows money.

Obviously, the council wanted to make itself look good with taxpayer groups and county unions, both powerful allies. But teachers and county workers aren't likely to get the 3 percent raise the council recommended this year. Both the school board and Mr. Neall indicated they will not grant it, for valid reasons. The county has just absorbed $65 million in state aid cuts, the effects of a recession and now a tax cap. The board had already intended to use the money the council suggested for raises to fill glaring personnel gaps in elementary schools. But whether raises are granted is of no consequence to council members at this point; the unions will blame the school board and Mr. Neall, not them.

Ironically, by lowering the tax rate, the council may have made it harder for unions to get future raises. Of course, the property tax isn't the county's only revenue source. The executive can always raise the income tax -- which he has so far refused to do.

However, if the effect of the tax cap and tax cut turns out to be as severe as projected, the income tax eventually will have to go up -- no doubt, council members hope, after they are re-elected.

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