Fiscal panel recommends selling more bonds

Soaring economy, needs of Howard are noted

February 04, 2000|By Larry Carson | Larry Carson,SUN STAFF

Emboldened by a soaring economy, Howard County's Spending Affordability Committee is recommending the county sell more bonds than last year to finance new buildings and renovations.

"It's amazing to me that every year the needs come in and they're so compelling. They just never stop," said Ed Waddell, an accounting firm owner who has been on the committee for several years. Despite that, Waddell noted that Howard's local piggy-back income tax is lower than Montgomery County's.

"We have too many things we haven't done since the 1970s," said Patricia Baker, vice president of the county's Parent Teachers Association Council.

Yesterday, the group heard about an urgent need for a $13 million classroom building at Howard Community College in Columbia, where the 25-year-old gym is in decline. Other county buildings haven't been renovated since they were built about the same time.

Howard County school board member Stephen C. Bounds, also on the committee, noted that neighboring Anne Arundel and Baltimore counties face huge backlogs of old-school repairs -- totaling $400 million to $500 million -- that Howard County doesn't have to make on its relatively newer buildings.

"That quality of life here, that's why people want to come here and bring their businesses here," he said, supporting the committee's view that capital projects will only enhance that allure.

With another $25 million cash surplus expected at the end of this fiscal year, June 30, the county can spend $55 million on brick-and-mortar capital budget projects while incurring only $30 million in debt from bond sales.

Based on projections by Raymond S. Wacks, the county budget director, selling $30 million in bonds a year will make the county's debt peak in fiscal 2002 at $416.5 million, but then gradually drop to $402.6 million by 2006 -- $9 million lower than it is now. Revenues are growing so much, he said, that all indicators show debt slowly declining as a portion of the total budget, though interest payments will grow by $8 million by 2006.

The committee plans to recommend selling $30 million in bonds next fiscal year instead of the $25 million recommended last year. Even if the stock market turns sharply downward, Wacks thinks Howard revenues will keep growing. As long as that continues, he said, the county's debt will shrink as part of the overall budget.

With the county's bond rating at the highest level, AAA, and a Rainy Day Fund available to cushion economic catastrophe, he said, the county is in much better shape than it was during the last prosperous time, in the late 1980s.

"In 1990, when we had our blowout, there was no safety net," he told the group meeting early yesterday at the county's Gateway Building in Columbia.

"Even if the stock market slows down and falls, people will still take what gains they have" by selling, he predicted, explaining that those sales will keep revenues high from capital gains income for at least the next year. Capital gains constitute about 10 percent of the county's income tax, he said.

Howard Community College Vice President Lynn Coleman told the committee that the college's classrooms are so crowded that additional 7 a.m. classes were filled very quickly.

"We are in desperate need of an instructional building," she said.

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