Strong economic outlook raises pressure to spend

Committee to hear revenue predictions

January 20, 2000|By Larry Carson | Larry Carson,SUN STAFF

Howard County's hot economy is expected to stay that way for another couple of years at least, generating more tax dollars for county government -- and more pressure to spend them.

"Everybody perceives that these are good times and they think we can afford anything," said Raymond S. Wacks, the county budget director.

County schools alone might want at least $35 million more next fiscal year once teachers' salary increases are factored in. Despite the high expectations for more tax revenues, they are hard to estimate now. Critical forecasting work is quietly being done to help County Executive James N. Robey prepare a proposed budget by mid-April.

Property tax revenues are fairly predictable -- they are increasing slowly -- so the big variable is Howard's share of state income tax collections. Last year, soaring capital gains taxes helped to fund a $22 million increase for the school system and build a cash surplus used in part to limit county debt.

"I have no more information about what's happening to capital gains than I had nine months ago," Wacks said last week at a meeting of the Spending Affordability Committee.

Today, Wacks might have some concrete projections. He will deliver them to the committee, a group of county officials and private citizens he heads. While it is not well-known to the public, the panel plays an important role: By next month, it will recommend a ceiling on what the county can afford.

One concern officials have is debt. Despite current prosperity, "the last 15 years there's been horrible stress between growth and affordability," Wacks said. As a result, Howard has borrowed a lot to keep its infrastructure, including schools and roads, in top condition and owes more than any other county in Maryland.

For now, the future is bright.

Last week, the group was told that Howard's economy would boom for another couple of years at least. "Obviously, the news is very good -- about as good as you could possibly expect," said Michael Funk, a senior economist with the Regional Economic Studies Institute at Towson University.

Still boasting Maryland's lowest unemployment rate, 1.5 percent, and highest median household income, $69,200, Howard is riding the crest of a wave that some economists worry will crash if inflation breaks out. Funk is optimistic, however, even though he expects the economy this year is "going to be slightly slower than the last couple of years."

"Howard County is the benchmark" for Maryland, Funk said, an exception to a trend that has seen rural counties growing faster than suburban ones. In its top 15 employment-gaining industries, Howard added 5,900 jobs between the first quarter of 1998 and the same period last year, Funk said.

In contrast, a survey of 63 local industries turned up only 14 that lost jobs, a total of 646.

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