Healthier times for local government Turn for the better: Surpluses bring new spending pressures to area fiscal officers.

November 14, 1997

MARYLAND FINISHED the last fiscal year $120 million in the black, and expects to double that this year. But state government isn't the only one with a sizable surplus.

Better times are bringing reserves to local coffers, too, in stark contrast to the recession of the early '90s. Fiscal year 1997 surpluses include $11.3 million for Baltimore County, $11 million for Anne Arundel, $12 million in Howard and $2.9 million in Harford. Income tax receipts exceeded expectations as the regional, state and national economies rolled forward.

Good fortune brings its own political challenges. There is no shortage of ideas for spending the cash. But governments have come to realize that these one-time windfalls must be dedicated to one-time expenditures.

Counties are not repeating the mistake some made in the 1980s when they used surpluses to pay continuing expense items and fatten their bureaucracies. Jurisdictions found themselves with major budgetary problems after the surpluses dried up. Many counties had to either lay off employees or impose hiring freezes.

Baltimore County this year is spending half its fiscal 1997 surplus to pay higher health insurance costs. It placed the balance in its ++ reserve fund, which now boasts $62.8 million, to protect the county's coveted AAA bond rating. Baltimore City reported $19 million in unexpected revenue after having made budget cuts.

Howard and Harford counties also are deciding which non-recurring expenses should receive money. In Harford, the cash could go toward new vehicles and computers. Howard is considering paying for expensive landfill remediation or building school facilities. The wish list there also includes a 300-acre farm that its neighbors want the county to buy and preserve as open space, and a highway interchange long promised to the same community.

Anne Arundel officials are considering school renovations, road repairs and equipment purchases. Also mentioned is a new job-training program for drop-outs -- an inappropriate use of the money if envisioned as ongoing.

In these improved fiscal times, governments can tend to needs they delayed or neglected earlier this decade. Unless their memories are short, public officials will be more discerning about the demands from various fronts.

Pub Date: 11/14/97

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