Senators reject Robey transfer tax proposal

Income or property levy rise suggested instead

`Dead is dead,' says Turner

Formal vote on the issue to be taken next week

February 13, 2003|By Larry Carson | Larry Carson,SUN STAFF

Money for schools normally comes first in wealthy Howard County, but a county plan to raise $215 million for school construction was effectively killed yesterday by the county's three state senators.

The decision is the first rejection of a major Howard school funding effort in recent memory and heightens a funding crisis for the county's top-rated, but crowded school system, which uses 107 portable classrooms. The school system is asking for $200 million in new capital projects over the next two years - including money for three new elementary schools and a new high school.

County Executive James N. Robey has said he will be hard-pressed for money next budget year after escaping a projected $18 million deficit last year.

Double-digit surpluses are a fond memory and state school construction aid is not expected to cover more than $7 million of the $87 million capital budget request for schools next year. Further state budget cuts would only worsen the situation.

"The bottom line to us is we will be looking at having to make $20 [million] to $30 million in cuts to the capital budget this year," said school board member Courtney Watson. School Superintendent John R. O'Rourke said, "If we don't get a response to our capital needs, we'll be devastated. Our budget is not frivolous. It's conservative."

The senators threw the issue back on Robey and the County Council with the suggestion that they consider income or property tax increases instead of Robey's plan to increase the real estate transfer tax from 1 percent to 1.5 percent, using the revenue to borrow $215 million and then repay it.

One county councilman did not appreciate the advice.

"I've got to tell you I'm offended by some of the language I've been hearing [from state legislators]," said Ken Ulman, a west Columbia Democrat.

"They [state legislators] cut the state income tax 10 percent, and they have the nerve to want to duck these issues," he said. "I don't like the posturing that the county folks should raise taxes, not us."

Ulman said the proposed $48 million Northern High School may have to be scrapped without the money from the transfer tax.

Robey, on a cruise vacation with his extended family, could not be reached for comment yesterday. The trip was planned before last fall's election, county spokeswoman Victoria Goodman said.

A formal vote on the transfer tax proposal, which would in effect create a separate dedicated fund for school construction over the next eight years, is scheduled for next week.

Raymond S. Wacks, the county budget director, said the county might borrow up to $70 million by selling bonds to help finance the $203 million in overall capital budget requests for fiscal year 2004.

Raising the income tax to the legal maximum would bring in about $22 million more the first year and $33 million the second, he said. Howard has the state's third-lowest income tax rate.

The three senators - two Republicans and one Democrat - yesterday declared themselves against Robey's transfer tax proposal, arguing that their support for county schools is not wavering.

They are just rejecting one method of raising money, they said, though Watson said it is hard to separate the vote from the issue of supporting schools.

"I do not believe that a tax increase on one [revenue] source should be used to finance an important countywide funding need. It is my philosophy that revenue measures to fund education should be as broad-based as possible," said state Sen. Edward J. Kasemeyer, a Democrat, in a prepared statement.

Both Republican senators, Robert H. Kittleman and Sandra B. Schrader, signed the statement after a county delegation meeting in Annapolis.

Kasemeyer, who heads the Senate capital budget subcommittee, said legislators were also "a little frustrated or irritated" that Robey presented his bill just as the General Assembly session was starting, giving them no chance for behind-the-scenes negotiations.

Goodman said Robey came forward as soon as he saw the crisis and had developed a plan.

Del. Frank S. Turner, House delegation chairman, said he would present the bill for a vote at next week's delegation meeting, but summed up the situation succinctly.

"Dead is dead," he said. Both delegates and senators must separately approve a local bill to advance it to the full Assembly.

Turner speculated that there "will be a lot more people mad when they raise the income tax. Do you think anybody [planning to move to Howard] calls Howard County government and says, `Do you have a 1.5 percent transfer tax?' No," he said.

Baltimore City and Baltimore County each have a 1.5 percent transfer tax, and Prince George's county is at 1.4 percent. Since Robey revealed his plan last month, the county's legislative delegation has had nothing nice to say about it, seeming to agree more with the objections of county Realtors, who are the only opponents.

Yesterday, Republican Del. Gail H. Bates repeated her objections, saying, "The numbers don't make any sense. I have a problem believing the numbers." The comment was a reference to Democratic Del. Elizabeth Bobo's doubts about the number of new county students coming from the sales of existing homes in older neighborhoods.

Kittleman agreed, adding, "The books are cooked some way. I don't like to deal with cooked books."

After the meeting, several Realtors who attended said they approve of the senators' move.

"This is what we've wanted all along," said Patty Smallwood, president of the Howard County Association of Realtors, who vigorously fought the increase in the transfer tax.

"My feeling is we all benefit from schools, so therefore shouldn't everyone be paying for the schools?" said Realtor David Leonard.

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