Panel calls for new fee or tax rise 2 options urged to pay $35 million it will take to clean, close dumps

Ecker cool to proposals

Long-term borrowing should be curbed, committee says

February 11, 1997|By Craig Timberg | Craig Timberg,SUN STAFF

A committee created by Howard County Executive Charles I. Ecker recommended yesterday a new fee or higher taxes to pay for $35 million in cleanup and closure costs at three county landfills.

In its far-reaching annual report, the Spending Affordability Advisory Committee also urged the county to curb its long-term borrowing, which has ballooned during Ecker's administration.

Howard now has the highest per-capita debt in the state -- owing $384 million, or $1,650 for every county resident in 1997. The debt was $1,623 per county resident last year. The committee recommended adding no more than $25 million a year in new debt next budget year, which starts in July.

It was the second time in three weeks that one of Ecker's committees urged new fees or taxes. And for the second time, Ecker -- considering a run for governor on the strength of his fiscal management of Howard County -- was cool to the idea.

"It's easy to say something when you don't have the responsibility," said Ecker, a Republican, after the committee issued its findings at a news conference in his office.

In his "State of the County" address last month, Ecker vowed he would not increase taxes or fees. But if he changes his mind, the proposal could come in his budget, due in April. Any such plan also would need County Council approval.

The spending affordability committee, composed of 17 Howard business leaders and county officials, warned that Howard has too much debt, including some projects financed by 20-year bonds that will outlive the usefulness of the projects. The committee's warning on debt and call for new fees mirrors its last report about a year ago.

The committee's report particularly criticized Ecker's plan to use 20-year bonds to pay for nearly all of the $35 million needed to clean up and close Alpha Ridge, New Cut and Carrs Mill landfills. All have serious contamination problems.

"We do not believe, as a matter of principle, that it is right for us to pass the debt for problems in the past, to our children and grandchildren," said Steve Sachs, the Columbia insurance executive who chaired the committee.

The committee suggested paying for the landfill projects with five-year bonds. The county would repay the debt through a temporary, tax-deductible charge that would increase tax bills.

That charge would start small, then grow as high as 2.7 percent of the current tax rate before ending after five years.

Sachs said the new charge would cost the average homeowner as much as $29 in additional taxes in its most-expensive year. But the five-year borrowing plan would save the county $21 million in interest payments compared with a 20-year bond.

The committee also endorsed a proposal to charge a new fee of $50 per home for improvements to the county's storm water management system, a project required by federal law. A separate committee had recommended that plan last month.

"If county government has reduced all of the expenses it can," the report said, "it needs to increase taxes or fees in order to provide the services and continue the quality of life that Howard County residents expect."

Committee member Retha Valderas, a Columbia accountant, put more bluntly: "It's real simple: We either reduce services or increase revenue."

Aside from new fees and taxes, the report's overriding theme was Howard's high debt.

Howard's $384 million of debt is costing the county $40.3 million, 12 percent of its revenue, in debt service this year. That's a level that can worry bond-rating agencies, though Howard has the highest possible bond rating.

The debt comes mostly from a decade-long boom in school construction and renovation as the county struggled to keep up with skyrocketing student enrollment.

Since 1991, Howard has borrowed $150 million to pay for schools projects, making it the largest part of the $384 million the county owes in general-obligation bonds. That is the type of borrowing directly supported by property taxes and income taxes, as opposed to separate revenue sources like water and sewer fees.

The result has been the highest per-capita debt in the state -- a problem that the committee said hurts the county's ability to pay for ordinary services.

"One could characterize the present condition of Howard County like the homeowner, who after paying his or her mortgage and buying groceries has no money left," Sach said. "For the county government, the bond debt service is our mortgage. And the education budget is our food bill."

To control that problem, the committee recommends borrowing no more than $25 million in general-obligation bonds next year.

The county's department heads recently proposed $94.1 million of projects in next year's capital budget, with $43 million of that borrowing coming from general-obligation bonds.

Ecker has said he intends to cut the amount of general-obligation borrowing to $25 million, mainly by trimming school renovation projects that do not add seats.

The report also said:

The county should not allow debt for a project to outlive the project's usefulness.

The county, school board and Howard Community College should look to privatize certain functions.

Ecker should continue his efforts to tie the salaries of county employees to evaluations of their performance.

The county should begin new fees for ambulance transport and false alarms. And tipping fees should increase at the Alpha Ridge Landfill.

Pub Date: 2/11/97

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