Governor's budget proposal apparently not what it seems

Md. is keeping money due county, official says

Howard County

January 23, 2004|By Larry Carson | Larry Carson,SUN STAFF

Gov. Robert L. Ehrlich Jr.'s proposed budget gives Howard County more money, his administration says, but local officials paint a much different picture.

In a complex series of moves worthy of a long game of Celebrity Poker, Ehrlich's budget would cut $2.5 million from Howard's highway maintenance fund, $1 million from Program Open Space and $1.2 million from three education categories, according to a chart from the state Department of Legislative Services.

But a one-time accounting move would give the county $4.9 million more in unclaimed income tax revenue, which would wipe out the losses - except for one thing. Howard and Maryland Association of Counties officials say the county is entitled to double the $4.9 million - but the state is taking half to help plug its budget holes.

"Is it appropriate to pay a 50 percent finders fee?" asked David S. Bliden, executive director of MACO.

On state budget charts showing "Direct Aid to Local Government," state aid is up 7.6 percent statewide and 6.7 percent in Howard County.

"There are some reductions, but this is the largest education increase in Maryland history," said Patrick Miller, an aide to James C. "Chip" DiPaula Jr., the state budget secretary.

But that's exactly the catch, said Bliden.

"It's not apples and apples. The increase is being driven by public education [Thornton Commission funding]. When you pull out education, you're going to find a decrease in funding. You can't plow snow or hire cops or hire firefighters or fund flu-prevention efforts with Thornton money," Bliden said.

In addition, he said, the Ehrlich budget proposal does not reflect the $48 million in Thornton money the governor did not include. "That doesn't appear on the [state budget] chart." The 2002 landmark educational reform program known as the Thornton Plan would provide more than $1 billion in new money to schools over the next few years.

The unclaimed local income tax revenue is another contentious issue, said Raymond S. Wacks, Howard County's budget director.

As a one-time device, the state has decided it can afford to change the length of time it holds unclaimed local income tax refunds from three years to two. That would produce a $9.8 million windfall next budget year.

But to help balance the state budget, Ehrlich is keeping half the refund money, even though the refunds are from the local share of the state income tax.

"They're giving us our money and saying we're even on state cuts," Wacks said. "On a real basis, they're keeping half the money that belongs to the counties." If the state doesn't restore the highway money and other cuts next year, the one-time windfall won't recur.

That is important in Howard, where income tax revenue this year is expected to be $22 million lower than predicted and has prompted another round of spending cuts and hiring freezes. County schools were asked to return $3.1 million to help reduce the shortfall.

The state highway and open-space reductions, as well as the loss of half the unclaimed income tax money, would only increase the overall financial pressure, Wacks said.

County department heads responsible for buying and developing parkland and maintaining county roads are not sure how the situation will play out.

"Obviously, it's a significant impact. How the county chooses to deal with it hasn't been decided yet," James M. Irvin, Howard's public works director, said about the $2.5 million reduction from highway user funds. To protect highways, for example, County Executive James N. Robey could absorb some of the state cuts in other parts of the county budget.

The Program Open Space reduction of $959,124 would not stop any particular project, said Gary J. Arthur, Howard's recreation and parks director, but it would delay work on various projects.

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