Smith to present first budget to council

Balto. Co. workers unlikely to get cost-of-living raise

April 16, 2003|By Andrew A. Green | Andrew A. Green,SUN STAFF

For the first four months of his term, Baltimore County Executive James T. Smith has been on the defensive, trying to stave off cuts from the cash-strapped state and to navigate a rocky relationship with the County Council.

Today, Smith gets a chance to take the initiative as he presents his first budget, an opportunity new executives traditionally use to make their mark on county government.

His presentation to the council occurs in the midst of tough economic times. County revenues are stagnant, the future of state aid to local government is far from certain and health-care costs for county employees are rising rapidly.

"Despite the challenges of the economy and the state's fiscal crisis and unresolved budget, I will submit a budget that keeps Baltimore County moving forward," Smith said yesterday.

The administration wouldn't talk about the details before today's 10 a.m. presentation, but those who have seen recent versions of the fiscal 2004 budget say county workers will get no cost-of-living increases for the second consecutive year and that the executive will use some county surplus funds to balance the books.

"It's difficult," said Donald P. Hutchinson, a Democrat who was county executive from 1978 to 1986, when Smith was a councilman. "You don't have big buckets of money to pull from, and that really creates a challenge. At the same time, you do want to put some money aside for those items that you think are absolutely essential for your administration to be successful."

Smith is the third county executive in a row to find himself faced with budget problems in his first year on the job, but both of his predecessors found ways to make their mark on the county.

In December 1990, Roger B. Hayden took office during a countywide revolt against taxes and government spending. Hayden, a former school board president with no political background, cut vacant positions from the budget and used the savings to fund education and give a modest tax cut.

Four years later, C.A. Dutch Ruppersberger held off labor unions looking for cost-of-living increases they had been denied for most of Hayden's term, but shuffled around enough money to start updating the infrastructure in older neighborhoods, a hallmark of his two terms.

Ruppersberger's eight years corresponded with the longest economic expansion in the nation's history, and he was able to make unprecedented investments in repairs to streets, alleys and schools. Hayden, on the other hand, ran smack into a recession. Before his first budget year was up, he was forced to make drastic cuts and furlough workers to save money.

"You get into the point of making difficult decisions, and then you have to do the best job you can to explain them and hopefully get people to understand," said Hayden, a Republican who served one term from 1990 to 1994. "Some do and some don't."

After Smith presents his budget, the council will hold hearings on proposed appropriations for each department. The council can cut money from the budget but can't add to it. In recent years, the council has made only moderate cuts, but as the county's final fiscal authority, it has the power to deal serious blows to the executive's agenda.

The fiscal year begins July 1.

"It may be the most important budget he sends up," said former County Executive Theodore G. Venetoulis, a Democrat who served from 1974 to 1978. "After a while, we're going to know what the relations are with him and the council. They're either going to continue to be rocky or they're going to get better. He has to learn his budget has to be in synch with what the council wants."

County Council Chairman Kevin Kamenetz, a Pikesville-Ruxton Democrat, said he hopes Smith will be cautious because of the uncertainty surrounding the county's finances and state aid.

The county has two surplus funds. One is the so-called rainy day fund, which is mandated by law and is monitored by bond rating agencies. The other is the undesignated surplus, used most recently to pay for this winter's extraordinary snow removal costs.

Kamenetz said he wouldn't be surprised if Smith uses part of the undesignated surplus but added that he would be "highly suspicious" of any budget that tapped into the rainy day fund. Given the uncertain state of the economy and state budget, Kamenetz said he would be cautious about how much of the undesignated fund is used, too.

"I feel some drizzling, but I'm not sure it's raining just yet," Kamenetz said. "I think we're certainly prepared to adjust to any cuts we receive this year [from the state], but we have to be mindful that there probably will be even more cuts next year. That's why I'm a little careful about tapping too deeply into the funds when we won't know what the weather conditions will be next year."

Harford is the only county in the area where the executive has already presented a budget proposal for the next fiscal year. Although County Executive James M. Harkins "cut everything else to ribbons," he did not use any of the $15 million in rainy day funds, said John O'Neill, Harford's director of administration.

"We're still waiting to see what happens from any additional cuts from the state," O'Neill said. "We're kind of holding our breath."

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