While leaders of neighboring jurisdictions are struggling with grim budget problems, Harford County is sitting on a $19.5 million surplus -- the result of overestimating expenses and underestimating revenue in the last fiscal year, officials said yesterday.
James Jewell, county treasurer, told the County Council last night that Harford is in better shape because of its conservative management.
The council members, who received an independent audit of the county's finances last night, agreed.
Harford differed from other local governments by discounting Maryland income tax projections for a 7 percent increase in the current fiscal year. Mr. Jewell said the county relied on its own, more conservative estimate of a 3 percent increase, while the actual amount is likely to be 3.5 percent.
The realization in recent weeks that the county had so large a surplus has touched off debate on how to use it, with county workers and teachers in particular looking for raises.
But County Executive Eileen M. Rehrmann has insisted that the surplus is needed as a hedge against expected cuts in state and federal aid that may hit harder in jurisdictions with less fortunate revenue situations.
Recently, Baltimore and Baltimore County warned of possible layoffs because of state income tax revenue much lower than anticipated. Carroll County announced a freeze on spending, and Howard County was considering a plan to cut spending by 12 percent over three years. Anne Arundel officials said they were looking for ways to make up a shortfall.
Harford's surplus includes $8.7 million earmarked for its rainy day fund, which Mrs. Rehrmann insists remain untouched to protect Harford's AA bond rating. She and local fiscal officials are scheduled to be in New York today for meetings with bond-rating firms.
But Jean Thomas, president of the county teachers' union, has said the county keeps too much money in its rainy day fund and should use at least some of it for raises. Teachers received a 3 percent increase last year, but none for the current 1996 fiscal year.
Mr. Jewell said money from the budget surplus may be needed to offset state and federal cuts. "We have no idea what kind of cuts we are going to take," he said. "We know there will be cuts, we just don't know how much."
The county has taken defensive steps, including asking the school system to freeze spending through June 30, the fiscal year end.
The county ended fiscal 1995, on June 30, with a $19.5 million surplus. The planned rainy day fund portion of some $8.7 million represents 5 percent of the general operating budget.
About $4.6 million of the surplus was added to this fiscal year's budget. Another $519,000 was used to pay leftover 1995 expenses. Mrs. Rehrmann recently said she would use another $310,000 to open the county's first police substation, in Edgewood.