$18 million budget deficit shrinks to $0

Income tax revenues, belt-tightening credited with making up shortage

`We acted responsibly'

Robey says reductions can't continue for long

state funding cuts feared

September 25, 2002|By Larry Carson | Larry Carson,SUN STAFF

While Maryland's budget climate continues to darken, Howard County's brightened sharply yesterday, as County Executive James N. Robey announced that an $18 million budget shortfall predicted last winter is gone.

Because of a combination of better-than-predicted income-tax revenues and sharp, though temporary spending cuts, Howard won't need a penny from its $28.8 million Rainy Day Fund to close the books on the fiscal year that ended June 30.

Robey got authority from the Howard County Council in May to remove up to $15 million from the county's reserve fund to fill the gap, if necessary.

Although county officials have had indications for months that the deficit was shrinking, they learned it was gone three weeks ago, Robey announced at a news conference yesterday in the George Howard Building in Ellicott City.

"I was shocked," at the news, he said later. "The bottom line is, we acted responsibly. We made preparations for the worst, and we restrained on spending."

Robey announced the news as he seeks a second term as county executive - and after weeks of criticism of his budgeting skills by his Republican opponent Steven H. Adler.

Yesterday, Adler called the news "terrific," but said the county might not have been as diligent about saving money without his criticism. "The size of growth in county government is still an issue," he said.

"I'm not sure Jim has the commitment to control costs until he is forced to do so," Adler added.

Howard's fiscal outlook depends to a large extent on what the new governor, to be selected in November, and General Assembly do to deal with the state's projected two-year deficit of $1.7 billion.

Robey said he would not know what impact the state's budget problems will have on Howard revenues until spring.

Local officials across Maryland expressed fears last week that the state will be forced to significantly cut local aid.

Robey and Raymond S. Wacks, the county budget director, said county income tax revenues for the second half of the fiscal year were $9 million over estimates, while the county was able to save $9.4 million - 50 percent more than predicted - by leaving jobs vacant and putting off projects such as road repaving and equipment purchases.

School cuts accounted for $1.5 million of the savings, Wacks said.

Wacks said the county's fortunes improved while the state's are falling because "we anticipated we would suffer a major impact from capital gains. The state underestimated the statewide impact."

The county benefited from leaving up to 100 jobs continuously vacant since winter, postponing road resurfacing and delaying out-of-state training, as well as from bond refinancing and last winter's lack of snow.

Robey said the county can't sustain those cuts, however, because some employees are doing the work of two people and postponed projects must be completed sometime.

"Folks we're asking to do double duty can only do that so long," Robey said.

Income tax revenues that were up 3 percent in the first half of the year were 6 percent higher in the second half.

County Council members - Democrats and Republicans - said they were delighted about Howard's balanced budget.

"I think that's the greatest news. I think the government is facing what [economic pressures] the private sector is facing," said Christopher J. Merdon an Ellicott City Republican.

"I think that's absolutely wonderful," said council Chairman C. Vernon Gray, an east Columbia Democrat. Politically, "it undercuts one of the main arguments Adler was putting out there."

Howard retains its coveted AAA bond rating, guaranteeing lower interest rates on borrowing, said Guy J. Guzzone, a North Laurel-Savage Democrat. "We are at the very top compared to jurisdictions all over the country."

Allan H. Kittleman, a west county Republican, also was pleased, he said, regardless of the political effect. "The county comes first," he said, noting that we're going to face a tough time next year."

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