Mr. Smith's budget

April 20, 2005

BALTIMORE COUNTY is anticipating a $216 million budget surplus by the end of June, and a booming real estate market and rebounding economy are a big reason why. Across the region, local governments are experiencing similar circumstances and contemplating using this sudden largesse to reduce property tax rates. Baltimore County Executive James T. Smith Jr. isn't. And that represents a rarity in politics - sound fiscal judgment.

To explain why, a little math is in order. Last week, Mr. Smith proposed a $1.45 billion budget for the coming year. That's slightly under 5 percent growth in spending and within the county's spending affordability limit. The budget includes a lot of necessities, such as more employees for the county's expanded jail and new police and fire stations, but it also allows for salary increases of 3 percent to 4.5 percent for county employees, a tuition cap for the county's community college, and dozens of added teachers and support staff for new schools and enhanced special education programs.

The surplus? Much of it was generated by real estate transfer taxes (a source that could easily dry up as interest rates rise) and will be plowed into capital projects. By putting the money into bricks and mortar, the county assumes a one-time expense that won't burden future budgets. In fact, a big chunk of the surplus is going into renovating the county's entire inventory of middle schools. That should save money by reducing maintenance costs now and borrowing costs in the future. There are plenty of other capital investments in Mr. Smith's budget, too, from a 50 percent increase in road resurfacing to a new library in Perry Hall and a skating and soccer complex in Reisterstown.

Investing in better schools, parks, roads and services is smart. Improving the quality of life is Baltimore County's best economic development strategy and far more effective than reducing the tax rate by a penny or two. The county already has a competitive tax rate - $1.115 per $100 of assessed valuation. And the best part for county property owners is they're already getting a tax break (and no doubt many don't even realize it). Thanks to the county's 4 percent cap on assessments, they'll benefit from a $30 million discount in their tax bills in fiscal 2006. Get it? The tax rate may be the same but the assessments are being kept artificially low.

Like the city it surrounds, Baltimore County is a mature community with the problems - and advantages - that entails. People are attracted to safe and pleasant neighborhoods with good schools, parks and other amenities. Mr. Smith's budget represents a prudent choice. Cultivating a superior quality of life is money in the bank - if not necessarily the pocket.

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