Robey vowing to revive failed tax proposal

Plan to boost transfer levy to return next winter

`I'm not going to give up'

Executive also ponders borrowing $100 million

Howard County

March 16, 2003|By Larry Carson | Larry Carson,SUN STAFF

As he ponders borrowing up to $100 million in the coming fiscal year for school construction and other capital projects, Howard County Executive James N. Robey is vowing to revive his failed transfer tax proposal "with a vengeance" next winter.

"I've had so many people from around the state - elected officials, Realtors and business people saying, `Why did this not go forward? It made more sense than anything I've ever heard.' I don't know why, and I'm not going to give up on it," he told six members of his Spending Affordability Committee during a meeting last week in his Ellicott City office.

The county executive had asked Howard's state legislators in January to increase the local real estate property tax from 1 percent to 1.5 percent so he could use the extra revenue to borrow $215 million for school construction over eight years, then pay off the debt. But the county's General Assembly delegation brushed the idea aside without a vote, though only county Realtors appeared to oppose it.

Still upset about the plan's defeat, Robey told the committee members that "there are those who say that the school board is nothing but a bunch of bloodsuckers. `You want all this money and you're wasting it,'" he said was critics' sentiment as Courtney Watson, a school board and committee member, listened.

But that is not true, Robey said. "There are major capital needs" that the county cannot afford to meet.

Because the transfer tax proposal failed, the Spending Affordability Committee officially recommended borrowing a record $70 million next year for capital projects, though several members said borrowing $100 million might be better now while interest rates are at historic lows. Robey proposed borrowing $48.9 million this fiscal year. The most the county has borrowed in one year since 1985 was $69.2 million in 1991 - another recession year.

Robey is to reveal his capital budget proposal by April 1 for the next fiscal year, and a proposed operating budget two weeks later.

At the meeting, Watson noted that the schools have absorbed 6,000 new students over the past four years and the board is trying to maintain services "with growth coming in the door. I truly thought $70 million was conservative," she said. "We could go higher."

Others, however, noting the uncertainties of possible state budget cuts and a war in Iraq, counseled caution.

Howard County budgeted $50.6 million this budget year for paying interest on debt, and that is projected to rise by $6.4 million, starting July 1.

Robey suggested convening the committee "much earlier" than normal later this year to talk about how to find money for school construction and other capital projects - something several legislators and County Council members said they also want.

State Sen. Sandra B. Schrader, a Republican who opposed the transfer tax this year, said she would like to see that happen and sent a letter to schools Superintendent John R. O'Rourke suggesting a similar idea. County Councilmen Christopher J. Merdon, an Ellicott City Republican, and Allan H. Kittleman, a western county Republican said they, too, would like to see a committee formed to look at capital needs over the next five years.

"If they come up with a transfer tax at the end, it's something I could support," Merdon said.

"Obviously, we need more money," Schrader said. "To me, communication is the key" to a solution.

House delegation Chairman Del. Frank S. Turner said he, too, believes the committee scrutiny may help, but noted that the transfer tax may look a lot better next year compared with income and property tax increases that may come on both state and local levels.

Robey faces a severe money crunch in capital and operating budget areas - to the point that he floated potential income and property tax increases that could cost a county resident with a $100,000 net income $750 more per year in income taxes and $205 more in property taxes for a house worth $200,000.

Another big question mark is the 4 percent pay raise that the county teachers union negotiated last year. Before a public hearing on the budget Wednesday night, Robey said it was the school board, not he, who agreed to pay the teachers 4 percent more next year - an $18 million expense. County employees got no cost-of-living pay raise this year, though they did receive longevity and performance increases.

With operating budget requests outstripping expected revenues by more than $50 million so far, employee pay raises may not be affordable. The last time an executive failed to honor a pay raise that the teachers negotiated with the school board was during the last recession, in 1992, when a 6 percent raise was ignored by former County Executive Charles I. Ecker.

County Council Chairman Guy Guzzone, a North Laurel/Savage Democrat, said any proposed tax increases have to be evaluated in a broad context, taking into account state and federal tax cuts in recent years that he calculates have saved an average county family up to $1,800.

"At this point, all I'm trying to do is get an accurate picture," he said.

Robey said a variety of capital needs, such as a new courthouse, new libraries and building renovations, cannot be ignored forever. He is determined to solve the problem before leaving office in 2006, he said.

"Sooner or later, someone's got to bite the bullet," he said.

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