The Board of County Commissioners cut Carroll's "piggyback" tax rate yesterday, choosing to sell $86 million in bonds to build two middle and two high schools by the year 2002.
The 2-1 vote means taxpayers will pay 55 percent of the state income tax rate next year instead of 58 percent -- a savings of $3 per $100. A taxpayer with a $1,500 state tax liability will save $45.
Commissioner Donald I. Dell voted against the measure, saying it would cost taxpayers $15 million to $20 million more to borrow the money than to keep the rate at 58 percent and pay a portion of the school construction costs in cash.
"It's wrong to generate an additional $15 million in taxes to pay interest," Dell said. "It's really a tax increase."
Commissioner W. Benjamin Brown, who proposed the tax cut in February, disagreed. The sale of bonds -- the chief way the county borrows money -- is fairer to taxpayers, he said.
"The argument you and I have is an old one -- whether the county is better off to [pay cash] to the extent that it can, or use bonding," Brown told Dell.
"I think bonding is the fairest way because it spreads the cost among all the users" over the years.
Commissioner Richard T. Yates voted with Brown but said he would have preferred an even larger tax cut.
"If I had my druthers, I would go back to 50 percent," Yates said. "If anybody wants to entertain that motion, I'm willing to go that way. If somebody else [on the Board of Commissioners that will be elected in 1998] proposes it and I'm still here, I'm going to vote for it."
Brown said the commissioners "have the responsibility to set the [piggyback] tax rate each and every year."
The rate had been 50 percent until Brown and Dell voted in 1995 to raise it to 58 percent and use the additional money to pay for schools.
Brown backed away from the idea in February, however, saying it was no longer workable because the state had not shared construction costs at the level he had anticipated.
A better solution, he said, was to cut the tax rate to 55 percent and use the income above 50 percent to pay interest on school bonds.
County bonds are issued for 20 years, although they can be "called" or bought back at a premium after 10. Interest rates vary according to market conditions and Wall Street's assessment of Carroll's ability to maintain interest payments.
Pros and cons
Susan S. Davies, spokeswoman for the Home Builders Association of Maryland, argued for keeping the tax rate the same as Brown and Dell proposed two years ago.
"The net gain [from the tax cut] is so minimal compared to the gains in pay-as-you-go goals" for school construction, she told the commissioners.
County Budget Director Steven D. Powell said yesterday's decision to cut the tax rate and set aside 9 percent of Carroll's income tax revenue to pay interest on school bonds will enable the county to build the schools it needs within the next five years, "but not in the years requested by the schools."
In order for the numbers to work, the county will have to stagger its bond sales, he said.
The school board wants to build a Westminster middle school and a South Carroll high school in 2001 and a Hampstead middle school and Westminster-area high school in 2002.
"My hope is that we will be fiscally able to do at least those four projects in 2001 and 2002," schools Superintendent Brian Lockard said.
Lockard said he would have to do more analysis to understand the full import of yesterday's vote, because the school board has planned to build an addition to Spring Garden Elementary and several smaller projects during the same period.
"How deep we can go into that list, I don't know," Lockard said.
Lockard said he remains hopeful that the county will provide the number of classroom seats needed to accommodate the county's growing population.
"I appreciate the County Commissioners and their staff working to put together a plan to help us while seeking state funding," he said.
Yesterday -- the end of the 1997 fiscal year -- was the last possible day the county could consider the tax cut, a county attorney advised the commissioners.
The state comptroller had to receive the change in writing by the end of the day, the attorney said.
Pub Date: 7/01/97