Harford executive seeks increase in piggyback tax

Projected budget deficit prompts Harkins proposal

February 25, 2000|By Jay Apperson | Jay Apperson,SUN STAFF

Harford County Executive James M. Harkins said yesterday that he plans to propose tax increases for county residents as part of an effort to address a projected budget deficit.

Pointing to a "dire situation" in county finances, Harkins said he is preparing to ask the County Council to raise the rate of the county's piggyback tax on income and to approve increases in the county amusement tax and on fees for services such as building inspections.

The proposals could add more than $15 million annually to a budget of about $245 million, while costing a typical taxpayer close to $200 a year.

Harkins, a first-term Republican, said additional revenue from tax increases would be spent on public schools and the police, which he said have been burdened by an influx of new residents in recent years.

Without additional revenue, the county forecasts a budget deficit of nearly $7 million by next year. County officials, who have imposed spending restrictions and a hiring freeze, said they will be forced to cut services unless more money is found by then.

"I know if you say to someone tomorrow, `What do you want to have happen?' raising taxes is not going to be up there," Harkins said. "This is not a conversation I want to be having right now, but this is a moment in time when I think I have to provide leadership."

Although the county had budget surpluses of at least $10 million as recently as five years ago, it ended the last fiscal year with a surplus of about $1.7 million, officials said. Harkins said costs for government in the fast-growing county have been rising 7.8 percent a year, while revenues have risen 4.2 percent annually.

Harkins said he has briefed County Council members on the county's budget plight. He is weighing the possibility of increasing the piggyback tax rate from 50 percent to between 55 and 60 percent.

The piggyback tax is added to a taxpayer's state tax bill to determine taxes owed to the county. If the rate is increased to 60 percent, it will mean a tax increase of about $190 a year for a household with a taxable income of $40,000.

Harkins said he hopes to fashion any tax increase so that the effect on a taxpayer will be negated by cuts in the state income tax.

The county executive also is seeking an increase in the county's amusement tax, levied on attractions such as movie theaters, from 1 percent to 10 percent. He said there are no plans to increase the county's property tax rate of $2.73 per $100 of assessed value.

Harkins is scheduled to submit his budget to the County Council April 1. Council President Gunther D. Hirsch has said he would support a tax increase to bolster education spending.

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