School system must return $3.1 million

Income tax revenue shortfall forces Robey to recall the funds

`Serious consequences' feared

Superintendent given a June 30 deadline

Howard County

November 14, 2003|By Tricia Bishop | Tricia Bishop,SUN STAFF

Howard schools will have to return $3.1 million to the county by June 30 to make up for a shortfall in income tax revenue, Superintendent John R. O'Rourke told Board of Education members last night during a meeting.

"This is likely to have some very serious consequences," O'Rourke said, adding that he was not prepared to "be specific about that."

County Executive James N. Robey had informed O'Rourke hours earlier that he would have to give up 1 percent of the school system's $310 million budget to soften the blow of a $10 million tax deficit from the fiscal year that ended June 30.

The news added further injury to the "agony and pain" the system already suffered during its budget proceedings for the current fiscal year, O'Rourke said. The result was $27.1 million cut from the education request, while another $5 million set aside by Robey in a contingency fund for schools never materialized.

The timing of Robey's message yesterday was particularly poor, the superintendent asserted, because there are only eight months left in the fiscal year during which to deal with the loss.

"We've been asked to absorb this midyear with very little sense of optimism about next year," O'Rourke said. "The effect is to increase the impact."

O'Rourke and his staff will outline a plan to cut spending and present a recommendation to the board as early as the Nov. 24 meeting, he said.

The reversal of fortune comes while school system officials are developing record budget requests for the coming fiscal year, which detail a need for $116.6 million in capital projects alone. County representatives have said they will not be able to provide such a large amount unless sources for extra revenue are found.

The school board voted last night to support three conflicting bills for introduction in the General Assembly, and before the local legislative delegation, that could raise money for school construction.

"We want to support any bill that's going to meet our needs in terms of school construction funds," board member Courtney Watson said, urging her colleagues to get behind all three even though only one could be passed.

The first bill is a pet project of Robey's that asks the delegation - which has turned down the plan once - to raise the county transfer tax to 1.5 percent. The increase would likely generate $10 million, which could then be used over the next seven years to borrow $215 million, said the school system's director of operations, Raymond Brown.

The other two bills are alternatives introduced by Del. Elizabeth Bobo. One would add a $12,000 surcharge on new construction, dedicated to schools. The other would raise the transfer tax on new construction sales to 2 percent, but leave the tax on sales of existing property untouched.

Another bill sponsored by Bobo and Del. Shane Pendergrass did not win board support last night. It asks that board members appointed on an emergency basis by the county executive - after an elected member has stepped down - fill the position only until the next scheduled election, rather than through the remainder of the departed member's term.

Two of the board's five current members - Joshua Kaufman and James P. O'Donnell - are appointed. They took their positions after two board members quit in as many years, which Watson called an "unusual string of resignations" unlikely to be repeated.

Another three bills before the delegation were developed by the board, asking:

To change the required meeting practices from twice monthly to at least twice a month from September through June and once a month in July and August. The board would still meet a minimum of 24 times a year.

That future board members receive health benefits at the same rate as school system employees.

That board membership be increased from five to seven. If that were to happen, five seats would up for grabs in 2006.

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