Caught in a time warp

Tax cap: Anne Arundel executive forced into an early '90s mode of belt-tightening in a period of growth.

February 24, 1999

JANET S. OWENS must think she is trapped in a time warp, before anyone had heard of "surfing the Web" and only James Bond carried a portable telephone. Although most county governments, like the state, are flush with revenue after seven years of economic recovery, Anne Arundel County's tight fiscal condition is forcing its new executive to curb her budget as if this were 1991.

Ms. Owens announced this week she may have to freeze hiring for the fiscal year that begins July 1. For weeks she has been dropping hints that her department heads should not ask for increases next year and should make every effort to shrink their budgets.

The Democratic executive discovered early how little flexibility the county property-revenue tax cap affords her. The cap, approved by voters in 1992, restricts the amount of revenue from real estate taxes to the rate of inflation or 4.5 percent, whichever is less.

No one imagined seven years ago that inflation could stay flat if the economy grew. It did. For fiscal year 2000, the formula will limit the increase in property tax to $10 million, about the same as in Howard County, whose budget is half the size of Anne Arundel's.

The tax cap isn't Ms. Owens' only problem. On her first day on the job in December, the Supreme Court upheld a decision that the county owed as much as $4 million in overtime pay to paramedics. Weeks later, a state court ordered the county to pay $600,000 to cover county employees whose workweeks had been extended by Ms. Owens' predecessor.

Ms. Owens could raise the county piggyback income tax rate to gain a few million dollars. But wary of being saddled with a "tax and spend" label, she has resisted.

Her strategy, apparently, is more painful: Propose a series of onerous budgets and it might prompt a rethinking of the tax cap.

Pub Date: 2/24/99

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