Interpreting Affordability

October 11, 1994

At a candidates' forum this weekend, Susan B. Gray, the Democrat running for county executive, warned audience members that the county was coming dangerously close to reaching its bond-affordability limit. She left the impression that current County Executive Charles I. Ecker has charted a course that has the county too heavily in debt.

This is an especially appealing argument to put before fiscal conservatives, one of the constituencies Ms. Gray hopes to lure from the otherwise fiscally-conservative Mr. Ecker.

fact, Ms. Gray has made this assertion about bond affordability many times during the campaign. It would be a fine tactic, except that it isn't true.

The bond-affordability limit for Howard County is legally mandated and put forth in the county's charter. At present, it limits the amount the county can borrow to 12 percent of the county assessable base. Currently, the county's assessable base is about $5 billion. But the county is nowhere near reaching that limit. In fact, Howard County is currently borrowing less than 5 percent of its assessable base.

The county does have a bond affordability committee, which annually determines a prudent level of borrowing. The committee has used 12 percent of the county's annual revenues as a guideline to set the annual level of borrowing. The county's current borrowing is about 10 percent of its annual revenues, which is below the recommended benchmark.

There are major differences between the limit established by the bond affordability committee and the one established in county law. For instance, the committee's threshold is not a mandate. It is meant to serve as an early warning system to county officials that borrowing is high, whereas the affordability limit represents an absolute cut-off. To go above the affordability limit would mean financial ruin for the county, not to mention the fact that it is illegal.

For Ms. Gray to suggest that Mr. Ecker has pushed the county close to the precipice established by law is simply inaccurate. And while budgeting can be intricate, Ms. Gray, an attorney, ought to know better. One of her campaign themes is to bring honesty back to government. She should start with her own campaign.

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