Rehrmann's Budget Claims are Badly FlawedAs someone who...


May 01, 1994

Rehrmann's Budget Claims are Badly Flawed

As someone who has been actively involved with the financial markets during the last 12 years, I have learned, sometimes the hard way, to always analyze all data myself rather than to rely on press releases and self-serving reports.

For the last four years, I have comprehensively reviewed Harford County's budget. In 1991 and 1992, at the request of County Executive Eileen Rehrmann, I served as a member of the executive's special fiscal budget and review committee.

The objective of this committee, which consisted of some of Harford County's most prominent businessmen and women, was meticulously review the budget to ascertain areas of potential savings, suggest guidelines for the limiting of government growth through the creation of a spending affordability committee and to review revenue assumptions and sources. In 1993, I was appointed, at the request of County Council President Jeffrey Wilson, to serve as a member of the council's budget advisory committee. This committee, of which I continue to be a member, extensively reviews the proposed budget and makes recommendations to the County Council.

To prudently manage taxpayer resources, a county executive must first prioritize citizen needs and then meet those needs with available resources. Failure to fully utilize taxpayer revenues is not only bad judgment but poor fiscal management.

During the last two years, County Executive Rehrmann has achieved a budget surplus of more than $30 million by TC significantly underestimating revenue growth, overestimating expenses and keeping 5 percent of the Harford County's budget unallocated. Another huge surplus will be shown for this current year's budget ending May 31, 1994. While the weekly incantation . . . has been that revenue growth has been "sluggish," audited financial data show that this is just not true.

Substantial increases in revenue have been seen in both property taxes, through a higher assesable base, and income taxes. These two sources account for 91 percent of the revenues of the general fund.

In addition, the revenues lost by state cuts have been more than replaced by a host of new fees and taxes such as the 1 percent transfer tax and the garbage tax, also known in the world of political doublespeak as the "tipping fee."

Although Harford's county executive contends her approach is "disciplined" and "conservative," a more appropriate term should "inept." Unfortunately for the children of our community, needed revenue is being placed in reserve instead of being properly used to finance our educational budget. Harford County's school system ranks 19th out of 24 jurisdictions in Maryland regarding per pupil spending. An increase of funding to this portion of the budget would require no new taxes, only common sense.

In addition, while our students rank in the highest quartile as to performance in the state, our teachers rank in the lowest quartile as to salary. Rather than lose many of these individuals, who are truly assets to our community, to other higher-paying school systems, it's time for the Rehrmann administration to return the omitted 1992 salary step increase.

This year the executive, who cites "education to be a top priority," proposes to fund only 50 percent of the Board of Education's requested budget increase. More than $8.5 million will be held in reserve and, if this administration holds true to form, revenues will again be underestimated and expenses will again be overestimated.

Although Harford County's debt has increased an astronomical 300 percent in three years, our executive contends that if her "disciplined" and "conservative" approach is not maintained, the bond agencies will lower our ratings. As a former vice president with both Smith Barney and PaineWebber, and currently the president of my own financial consulting firm, I contend this is pure fiscal baloney.

Perhaps the executive has poor advisers. Or maybe she just doesn't understand the financial markets. Whatever the excuse, County Executive Rehrmann is exhibiting bad judgment by not allocating these needed resources.

I hope the County Council members will use their power this year to help the children . . . by removing this unappropriated balance from the county executive's budget and properly funding the majority of the Board of Education's request.

After all, isn't a mind a terrible thing to waste?

Ron Szczybor


The writer is a candidate for county executive in Harford County.

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