Budget calls for hefty rise in income tax

Rate would jump to legal limit of 3.2% in $892.4 million plan

Workers could get 4% raise

County Council to vote on blueprint May 23

Howard County

April 22, 2003|By Larry Carson | Larry Carson,SUN STAFF

Howard County's income tax rate would jump from Maryland's third-lowest to the legal limit while county workers could get a 4 percent pay raise in the $892.4 million budget proposed yesterday by County Executive James N. Robey.

Robey's plan represents the largest tax increase by far yet requested by any of Maryland's seven largest jurisdictions, and would cost $521 more a year for a family with the county's median gross household income of $83,100, if it is approved by the County Council.

Combined with state property tax increases, rising assessments and higher lien fees for Columbia residents, the total tax bill could jump by more than $1,000 for many Howard County families.

"We've been able to keep our taxes low, and the clock has run out," said Robey, a Democrat, before presenting his plan to the council last night. "I'm expecting criticism from everyone."

Howard has never raised the income tax rate, and five years ago the county reduced it slightly. Robey is asking to raise the rate from 2.45 percent to the maximum 3.2 percent - the highest allowable in Maryland. That would help fund a budget 9.35 percent larger ($48.2 million) in locally funded spending.

David S. Bliden, executive director of the Maryland Association of Counties, said, "Keep in mind that during the past four years, 19 of Maryland's 24 subdivisions have raised taxes, and you've had a significant number raise property and income taxes. Howard has been able to forestall the inevitable for some time."

Despite the proposed tax increase, Robey cut $15 million from the school board's $330.5 million request, and did not approve hiring any of the 21 new police officers requested. The executive said the bulk of new spending would go for education and fixed-cost increases beyond the county's control. The operating budget would fund 220 new teachers, but would leave 100 other vacant county jobs unfilled.

"We're faced with very, very difficult - if not impossible - choices, but we're going to have to make them," schools Superintendent John R. O'Rourke said. "The thing's that the budget we first presented was very tight. It's now about to get a great deal tighter."

"I'm very nervous about it," said Sandra H. French, school board chairman, referring to the chance for more state budget cuts.

Robey said he is frustrated with the still-fuzzy revenue picture from Annapolis.

"The General Assembly came and the General Assembly went, and we still don't, at a local level, have a real understanding" of what will happen financially, Robey said.

The executive called his offering a maintenance budget with higher taxes forced by the slow economy and state aid reductions. He did not include any local money to create a much-discussed drug court, for example, nor did he fund any new local programs, he said.

If approved, the county would collect $24 million from the income tax increase next fiscal year, and about $60 million in fiscal 2005, since the tax rise would not take effect until Jan. 1. With Gov. Robert L. Ehrlich Jr. talking about cutting $1 billion from the state budget in fiscal 2005, the $60 million likely will be needed, Robey said.

This spring, Harford and Baltimore counties have proposed no tax increases and no employee raises, while taxes would rise slightly in Prince George's, Montgomery and Carroll counties. Budgets for Anne Arundel County and Baltimore City have not been announced.

County workers are assured a 2 percent pay raise, Robey said, and will get 4 percent if the state does not cut any more local aid. Robey said he is holding back $7.5 million against possible cuts that could come if Ehrlich, a Republican, vetoes $135 million in new state taxes approved by the General Assembly.

If the state cuts another $9 million or $10 million from its aid to Howard, Robey said, he would lay off county workers rather than cancel the 2 percent portion of the cost-of-living increase.

"Layoffs - no hesitation - layoffs. We've got to stay competitive," with other jurisdictions, some of which have given teachers and police officers pay raises, Robey said. Robey said he believes he has support from at least three of the five County Council members, but the council will not vote on the budget until May 23, after a series of public hearings and work session discussions.

None of the five councilmen criticized his proposal yesterday. But several said they have to examine it in detail.

"I'm disappointed that the tax increase is as high as it is, but it's not surprising," said western county Republican Allan H. Kittleman. "I have sympathy for him in the position he's in." Kittleman wondered if county workers need both a percentage pay raise and step increases.

Council Chairman Guy Guzzone, a North Laurel-Savage Democrat, made another point.

"When you consider that with state and federal government tax cuts you've gotten over $1,200 [in tax savings] - somewhere these services have got to be paid for," he said.

Christopher J. Merdon, an Ellicott City Republican, said, "I don't want to say he's gone too far until I see the detail. The way they're doing salary increases is very creative." He questioned whether the county will need all $60 million in the second year of the income tax rise.

East Columbia Democrat David A. Rakes said he is "very pleased" that Robey is including a pay raise for county workers, especially teachers.

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