Tax-cut veto has weight

Robey's alternative plan for relief could mitigate promise to kill bill on assessment cap

March 08, 2006|By LARRY CARSON | LARRY CARSON,SUN REPORTER

County Executive James N. Robey's vow to veto a Republican-sponsored tax cut seems to defy the prevailing political pull in an election year -- especially for a Democrat running for state Senate.

Robey's last-minute, strongly worded promise to kill the bill sponsored by western county Republican Charles C. Feaga is likely to stick because the measure was approved Monday night on a 3-2 County Council vote, one short of the four council votes required to override an executive veto.

The bill -- which would cut from 5 percent to 4 percent the annual cap on how much a home's assessed value could rise -- would not take effect until July 2007 if signed into law. The measure would cost the county treasury $3.8 million a year while saving the owner of a median $450,000 home about $46 a year.

But the executive may have inoculated himself somewhat from political criticism of his threatened veto with a tax-cut remedy of his own: a more immediate reduction of 3 cents from the property tax rate for the budget year starting July 1. That would save the same homeowner an estimated $135 a year and cost the county treasury $9 million.

Robey said yesterday that a $9 million tax cut is what he determined the county could afford. Cutting property tax rates is what Republican Gov. Robert L. Ehrlich Jr. has proposed for the state and what Ehrlich has recommended for local governments, too.

"I wanted the world to know, and the three sponsors of the bill to know, I'm not playing politics with the future of the county for $4 a month. I'm still $3 million short of balancing the operating budget [for next year]," Robey said.

Vetoing a tax cut in an election year may seem politically imprudent, but it fits Robey's past behavior.

Three years ago, he and council Democrats pushed a 30 percent income tax rate increase through the council, bringing Howard's rate from third-lowest in Maryland to the legal limit amid howls of protest from Republicans and a citizens group of tax protesters who tried but failed to put the tax increase on the 2004 election ballot.

Howard, like other counties, has benefited from a predictable, if silent, annual revenue increase based on tax increases from higher property values. Robey's worry is that future officials may be loath to increase tax rates if the cap goes down now.

Feaga's bill, Robey said in a statement issued three hours before the council meeting, "would be irresponsible policy and a dangerous maneuver" because it would limit revenue over the long term. In his view, it would put Howard County on the tax-cap path that has limited the ability of Anne Arundel and Prince George's counties to build schools and roads.

Carroll County's all-Republican officials are fighting a similar battle, with the county's state legislators proposing an assessment cap cut to 5 percent from 7 percent, which the county commissioners complain would hurt vital projects.

"I have seen surrounding jurisdictions impaired by such measures, and I will not allow it to happen in Howard County," Robey said in an unusually long statement.

Pointing to sharply rising health care and energy costs, the new requirement to fund retiree health benefits and a looming structural state budget deficit, Robey said, "It would be unconscionable for us to tie the next administration's hands via this reduction."

Robey, who is term-limited and cannot run for re-election, called his proposed tax cut "real tax relief."

Democrats Ken Ulman, who is running for county executive, and Guy Guzzone strongly backed Robey's stance, while Republicans Feaga and council Chairman Christopher J. Merdon said they were surprised and baffled by the move.

David A. Rakes, an east Columbia Democrat, was the third vote for the bill.

"On this measure, I'm going to stand shoulder to shoulder with Jim Robey," Ulman said at the meeting. He said Feaga's bill, if it becomes law, would amount to "fiscal handcuffs" on the county.

Guzzone said the executive "has done a fine job managing our finances," and the "next stage" of tax relief, after increased credits for low-income families and a property-tax deferral offered to seniors last year, is the "broad tax relief" in Robey's proposed 3-cent cut.

Feaga said he was upset by Robey's failure to talk to him about the veto message before it was issued.

"We're personal friends," he said, adding that his bill would result in "a very small decrease. ... It's going to save a few dollars. It is not going to hurt us at all."

Merdon said he, too, was puzzled by the lack of notice. He said he learned of Robey's veto statement in a telephone message just a few hours before the council meeting, although the bill was introduced a month ago and no administration testimony was offered at the public hearing Feb. 21.

But Robey said that since the bill had a majority of three sponsors, he saw no point in talking to them ahead of time.

Merdon also said the bill would not cripple the county financially because future executives and council members have the ability to raise the property tax rate each year. Although he has not decided whether to support Robey's 3-cent tax cut, Merdon said he will support a tax cut of some kind that will cost the same $9 million annually in revenues as the executive's proposal.

larry.carson@baltsun.com

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