Transfer tax wouldn't remedy tight budget, councilman says

Howard would still need $20 million, he predicts

February 05, 2003|By Larry Carson | Larry Carson,SUN STAFF

Howard County likely will be $20 million short in capital budget construction funding next year even if the Robey administration's proposed transfer tax increase is approved, County Council Chairman Guy Guzzone said yesterday at a meeting between the council and the school board.

Ellicott City Republican Christopher J. Merdon added a new, longer-range warning for school officials - that rezoning planned along the U.S. 1 corridor would result in "hundreds and thousands of new dwelling units" that ultimately would produce more students than classrooms can handle.

This week is crucial for County Executive James N. Robey's plan to increase the real estate transfer tax from 1 percent to 1.5 percent and use the revenues to borrow $215 million for school construction over eight years, and then pay off the debt.

Robey will try again to persuade county legislators to approve the idea at a delegation public hearing on the bill scheduled tomorrow evening in County Council chambers in Ellicott City. A vote is scheduled next week.

Robey's cause got a boost this week from the county's PTA Council, which endorsed the transfer tax increase, but he told the group that right now, "I'm dead in the water in Annapolis" without strong support from school advocates.

The comments yesterday by Guzzone, a North Laurel-Savage Democrat, seemed designed to bolster Robey's argument by noting that even with the tax increase, capital budget funding would be dicey at best.

In addition, Deputy School Superintendent Sydney L. Cousin said the system has yet to acquire land for any of the three elementary schools planned to open in 2006 in the northeast, north-central and western county. With the new 12th high school, which has a site, they are the only buildings planned.

Each elementary school requires about 15 acres, Cousin said, although board member Virginia Charles noted that often a much larger site is required to get 15 usable acres. The new Bellows Spring Elementary is on a 41-acre site, of which barely 15 acres are usable.

Cousin said any school construction requests not met in fiscal 2004 would be back the next year - when the projected capital budget for schools is a record $112 million. "We need to get through these next two years. Otherwise we'll be facing the same situation over and over again," Cousin said.

Any delay in finding land to build the three elementary schools will result in more portable classrooms (the county has 107), more redistricting or classroom additions to buildings where cafeterias, auditoriums, hallways and gyms can't be expanded.

The county has constructed 26 buildings since 1994 - 13 elementary schools, nine middle schools and four high schools. It must add 80 kindergarten classrooms by 2007 to follow state mandates for all-day sessions.

In what he termed a "thumbnail analysis" at the end of the nearly two-hour session, Guzzone sketched a version of the county's dilemma that a Republican member disagreed with - though only marginally.

Guzzone said that when roughly $20 million in general county capital budget projects are added to the $87 million in school construction requests, the total of $107 million would exceed revenues - even with the $30 million in leveraged borrowing the transfer tax increase is predicted to generate the first year.

Guzzone speculated that the county might borrow $50 million through sales of general bonds, and could possibly look forward to $7 million in state school construction money - more than double the $3 million approved so far. Totaling $87 million, those three sources could pay for school requests, but would then leave nothing for anything else.

Merdon later differed with Guzzone's analysis, saying he believes the county could safely borrow $60 million and spend no more than $10 million on general county projects, covering the whole bill for fiscal 2004. But he conceded that the transfer tax money is vital even in that scenario.

The county Spending Affordability Committee is working to produce by next month a recommended ceiling for general bond borrowing next fiscal year. The committee recommended a $50 million limit for the current budget year, but Robey stayed under that by asking for $48.9 million in bond borrowing for his total $97 million capital budget.

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