Baltimore Co. surplus boosts Rainy Day fund to $17 million Income tax revenues bigger than expected

August 27, 1993|By Larry Carson | Larry Carson,Staff Writer

An larger-than-expected $6 million surplus from the fiscal year that ended June 30 has bolstered Baltimore County's year-old Rainy Day fund to $17.5 million, officials said yesterday.

Budget Director Fred Homan said that $5 million of the unexpected money is from higher-than-expected income tax revenues, but he cautioned that it won't be clear until next month whether the $5 million represents a real increase in county income or is the result of an uneven distribution by state tax officials.

Of the other $1 million in extra funds, $700,000 is left over from the county's $1.1 billion budget, while $300,000 is from other sources, mainly higher-than-expected interest earnings and revenues from permits and licenses. Mr. Homan had predicted a $2.45 million surplus in April, when this fiscal year's budget was first presented.

All the extra money now goes into the county's Revenue Stabilization Fund, known as the Rainy Day Fund, and can be spent only with the approval of five of the seven County Council members.

The fund was created last spring as a permanent hedge against unanticipated financial crisis, but none of money was used to offset a $31 million projected shortfall caused mostly by cuts in state aid to local government. Mr. Homan and County Executive Roger B. Hayden contend that spending the fund as part of a one-time fix would hurt the county's Triple-A bond rating and result in higher interest on long-term borrowing through bond sales. The answer, they insisted, was the permanent reduction of the county government payroll.

In February Mr. Hayden eliminated 566 county jobs, laid off 290 people and closed nine libraries and four senior centers.

"We believe revenue sources are starting to stabilize, but this economy requires diligence," Mr. Hayden said.

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