Doing Right Thing by Raising Taxes


March 26, 1995|By BRAIN SULLAM

When Carroll's commissioners announced that they were considering increasing the county's "piggyback" tax to 60 percent, they showed the kind of political responsibility that has been lacking in this county for years.

They acknowledged a harsh and unpleasant reality: Carroll's financial condition has become untenable. There is no way to continue to operate the county government with the current rate of taxation.

After five years of cutting government, eliminating programs and positions, there is virtually no fat remaining in the county budget. Further spending reductions would mean closing libraries and senior centers, increasing class size in schools and postponing road repairs.

If Carroll is to have a balanced budget for the next fiscal year, the only course of action is to increase the amount of revenue. Calling for an increase in taxes, however, is like leading a charge against a machine gun nest. You become a big target.

The most vocal -- and least realistic -- are already firing away.

"I think the electorate spoke loud and clear last election and that was for less taxes, less government and less growth," New Windsor resident Steven E. Davidson writes in a letter elsewhere on this page, effectively summarizing the anti-tax sentiment.

But the electorate also sent another message: Build schools to ease the overcrowding, build roads to ease the congestion, build libraries and parks to improve the quality of life.

Previous boards of commissioners may have been able to maintain the fiction that the county could build the public infrastructure without increasing taxes. In fact, two dynamics converged to make the fiction possible: a rapidly growing assessable tax rate and a population with rapidly increasing incomes.

Between 1985 and 1990, the county's assessable tax base increased 27 percent in real dollars, which means that inflation has been factored in. As a result of this tremendous growth in the value of Carroll's real estate, property tax collections doubled from $23 million in 1985 to $44 million in 1990.

During the same period, local income taxes climbed from $18.6 million in 1985 to $32.4 million in 1990. The recession of 1990-92 put a damper on this growth, but it didn't fully show up for another two years. Because of Maryland's triennial assessment cycle, the full impact of the recession on property values didn't register until last year. Property tax collections, which had increased at nearly 91 percent during the 1985 to 1990 period, increased at a third that rate of increase -- 32 percent -- between 1990 and 1994.

The state's deteriorating fiscal condition also compounded Carroll's woes. Between 1991 and 1993, Carroll lost about $18.7 million in state payments. It also had to pick up a number of state programs -- such as home-delivered meals for senior citizens, youth counseling services, water inspections and others. By 1990, Carroll also received the last of the millions in federal revenue sharing dollars that it had used to plug budgetary holes in the 1980s.

At the same time the county was experiencing this deceleration in the growth of revenue, the population of the county was accelerating, growing nearly 20 percent between 1985 and 1994. More people means more services, particularly more schools.

While the proportion of school-aged children compared to the total population has remained stable -- about 30 percent -- during this period of rapid growth, the actual number has increased at a rate of about 1,000 children a year. In other words, the growth in the number of children is equivalent to building a new elementary school each year.

During this period, the county did not build the schools to accommodate this explosion. The consequences of that sluggish building program are seen in severe crowding in many county schools and the need for a crash construction program through this decade.

zTC Other decisions only compounded the problem. During the past four years, the commissioners de-emphasized the county's economic development program. They refused to hire a full-time economic development director and ran a half-hearted operation attract new business.

As a result, Carroll now has the lowest proportion of commercial and industrial land -- which generates large sums of real property tax -- in the Baltimore metropolitan area. Only 14 percent of the tax base is industrial or commercial compared to 25 percent in Howard and 22 percent in Frederick.

Commissioners Donald I. Dell and W. Benjamin Brown seem to recognize that if the county is to continue functioning at its current level and build the necessary schools, taxes must be raised.

Richard T. Yates continues to hold on to the dreamy notion that doubling the county's impact fee will generate sufficient revenue to take care of the needs.

While the commissioners have not formally agreed to increase the piggyback tax, the handwriting is on the wall: Carroll residents will experience a tax increase this year and may face another next year.

Brian Sullam is The Baltimore Sun's editorial writer in Carroll County.

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