Howard budget chief weighs options for $20 million surplus

Though slowdown likely, many requests for funds

January 28, 2000|By Larry Carson | Larry Carson,SUN STAFF

With Howard County's revenues $20 million over last spring's predictions and growing, budget Director Raymond S. Wacks doesn't know what to expect anymore.

If he keeps believing predictions of a stock market slowdown and it doesn't happen, he risks tying up huge income tax surpluses that by Howard law may be used only for one-time expenses such as new buildings -- not for requests of hiring police or teachers.

But if he tells County Executive James N. Robey to bet his next budget on the roaring economy continuing -- and it doesn't -- the county could wind up in a hole.

"The philosophical issue is, `Are we dealing with a bubble in the stock market?' Nobody knows," Wacks said. "People are saying the economy can't sustain what it has sustained."

Even with interest rates on mortgage loans rising, the county is collecting more transfer and recordation taxes because of a hot real estate market, Wacks said.

All of this belies the budget director's experience and training, not to mention common sense, which tells him that stock prices can't keep rising. He worries about what will happen when that bill comes due.

Wacks spoke about the problem after a meeting of the county's Spending Affordability Committee yesterday morning at the Gateway Building in Columbia, but he did not raise the subject during the meeting.

And other than a brief mention in his annual State of the County speech before the Chamber of Commerce on Jan. 20, Robey wasn't making time to talk about it, either.

If that extra $20 million-plus were available for next fiscal year's operating budget, it could help pay for the 60 new police employees -- including 42 sworn officers -- requested by Chief Wayne Livesay, the 35 more firefighters Chief James Heller wants, or the extra $20 million to $30 million needed to satisfy school budget requests.

Teachers are trying to negotiate big pay raises for the next school year because their $29,000 starting salary -- $3,000-a-year lower than a police officer's -- is 10th in the state, down from third in the state. And with a looming teacher shortage, Robey has said Howard County must be competitive. He has promised to honor any pay raise the teachers negotiate with the school board.

The surplus could be used for bricks-and-mortar projects -- as last year's $26 million surplus was -- and could indirectly help the operating budget. The more ready cash used for capital budget items, the less borrowing the county has to do, and that would keep the annual $47 million loan interest payment from rising.

Even with capital projects, Wacks sees problems.

The good economy is bringing requests for more expensive projects. "We know there's a lot of money, but there's also a lot of needs," he told the committee.

The biggest request is the school board's $53 million for construction, including an $11 million northeast elementary school that wasn't in the plan last year.

The county needs a new $30 million emergency radio system, the Fire Department is planning a new western county station by 2004, and police Maj. Mark Paterni told the committee that he expects police to need a third station in a few years, despite recently reoccupying the newly renovated Ellicott City headquarters. "The county couldn't afford to expand" the building, he said.

Howard Community College wants to construct a $17 million classroom building, and complete $8 million worth of renovations on campus, and the county library trustees want to build two more branches in a few years.

All of that will take more money, Wacks said after the meeting. "This whole round of elementary school construction wasn't in there before," he said, and the county is going to have to spend more operating budget cash on road projects to help clear congested traffic.

"All of a sudden," Wacks said, "the rules have changed."

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