Official reports budget surplus

Last fiscal year's $750,000 boon seen as `good news'

Some talk of future tax cut

Continued improvement needed first, Robey says

October 04, 2004|By Larry Carson | Larry Carson,SUN STAFF

Though Maryland officials closed the last fiscal year with a $300 million surplus, Howard County took in just $750,000 more than expected last fiscal year, budget director Raymond S. Wacks revealed last week.

But Wacks and finance director Sharon Greisz said the year-end bonus, while small compared with annual county surpluses of $6 million to $12 million before the recession, is one signal of brightening fiscal fortunes. The budget year ended June 30, but figures became available last week.

County law requires that surplus revenues that turn up after a budget year's books close June 30 can only be used for emergencies or one-time items - such as building projects.

If things continue improving - barring more state budget cuts - there could eventually be a local tax cut, officials said.

"That may be possible," Wacks said. "We'll move forward and see what happens."

County Executive James N. Robey, a Democrat who pushed through a controversial 30 percent increase in local income taxes last year, was cautious about predicting a tax cut.

"Today is not the time. The next budget preparation is not the time. It's too early to guesstimate that," Robey said. "I'd love to give something back to the taxpayers when it's doable, but it's not doable yet."

A one-time windfall release of state income tax withholding reserves also allowed Howard to fill its rainy day fund to the legally required 7 percent of county spending ($34.7 million) by adding $6.2 million to the fund.

The surplus represents a stabilization of county finances after several consecutive years of constant spending alarms, projected revenue shortfalls and midyear belt-tightening - as well as the income tax increase last year - because of stagnant or declining revenues.

"This is good news for the county," Wacks said. "We ended the year with a small surplus, but cleaned up some of the fiscal problems we had."

Greisz said the county can't yet tell whether circumstances will continue to improve because it won't begin receiving state income tax withholding for the current fiscal until next month.

County Council Chairman Guy Guzzone, a North Laurel-Savage Democrat, said the surplus and the improving revenue picture shows that the county is meeting its responsibilities, unlike the administration of Gov. Robert L. Ehrlich Jr. The state is facing a revenue shortfall.

"When times were tough we had the courage to step up and do what was necessary. We're still waiting for the state to do that," he said, referring to the state budget imbalance and Ehrlich's refusal to raise major income or sales taxes.

A future tax reduction in Howard "is absolutely an option. That's on the table," said Guzzone, who is a possible county executive candidate in 2006.

Ellicott City Councilman Christopher J. Merdon had a different take on the situation.

"I think that [Councilman] Allan Kittleman and I proved two years ago that we didn't need to raise taxes," he said, referring to a list of budget cuts the two Republicans suggested that was rejected by the council's majority Democrats.

"The fact that we have a surplus is good news. Everybody should be happy about that," Merdon said.

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