Flush with extra revenue from a booming real estate market, Baltimore County Executive James T. Smith Jr. proposed a $1.6 billion budget yesterday that would give county employees a raise for the third straight year while offering tax relief to homeowners on limited incomes.
The fiscal 2007 spending plan, 10 percent higher than this year's budget, also would funnel more money to school renovations and increase police ranks.
Smith, in the final year of his first term, called his proposal a "disciplined, efficient budget" in a speech before the County Council yesterday. As in his previous budget plans, he did not request a change in the piggyback income tax or the property tax rate of $1.115 per $100 of assessed value. The county expects more property tax revenue because of rising assessments.
Council members said they were generally pleased with the executive's election-year budget, but at least two said they wanted to look at cutting the property tax rate for everyone.
"I can't imagine anyone who's not happy with the budget," said Councilman Kevin Kamenetz, a Pikesville-Ruxton Democrat, "because you're giving raises to county employees and you're not raising taxes, and perhaps you're even offering tax relief."
The County Council, which by law cannot add to Smith's budget but can cut from it, has scheduled a public hearing on the spending plan for April 25. Council members expect to approve a budget by May 25.
In addition to the operating budget, Smith proposed spending $273 million on capital projects, including the construction of Vincent Farms Elementary School in eastern Baltimore County, a new library in Perry Hall, recreational and community facilities and various redevelopment projects.
Under Smith's operating budget, teachers' salaries overall would increase by 5 percent, with individual raises varying depending on a teacher's position in the salary scale. All other county employees would get a 3 percent raise.
County spending for schools would increase by $16.8 million, to $633 million, not including state and federal funds, which would be used to complete a systematic renovation of middle schools, create 197 new positions and bring all-day kindergarten to 10 elementary schools.
"I just can't thank [the administration] enough for being so supportive of educational needs of our school system and certainly our children," said schools Superintendent Joe A. Hairston.
The county Police Department would receive funding for 21 new officers - eight for an investigative unit focused on illegal firearms and 13 for "community action teams" focused on robberies and property crimes in commercial areas.
Money would also go to land preservation, and waterway and watershed improvements.
Smith said he considered a cut in the property tax rate but ultimately chose a tax-credit program that would spread $3 million of relief to an estimated 8,500 homeowners next year.
"It puts emphasis on those who need it the most," Smith said.
The credits - which would vary depending on a resident's income level, net worth and home value - would be offered to those who qualify for the state's homeowner tax credit program. The executive's plan would go beyond a bill introduced recently by two councilmen to provide relief to older homeowners.
With assessments pushed up by rising property values, the average homeowner's tax bill is expected to increase from an estimated $1,706 this fiscal year to $1,788 in 2006-2007.
County Councilman Joseph Bartenfelder said he liked the idea of the tax-credit program, but that, given the county's strong financial standing, he believes the council's goal should be cutting the overall property tax rate.
The last time the property tax rate was cut was in 2001.
"I think any year you can do it is the year to do it," said Bartenfelder, a Fullerton Democrat.
The council could require that the $3 million in Smith's budget for the tax-credit program be used instead for lowering the property tax rate, Kamenetz said.
A half-cent cut in the tax rate would cost about $2.5 million, county officials estimate.
"Perhaps in the end, that's the more equitable way of doing it," Kamenetz said, adding, "this way we'll ensure that every single person has the benefit of it."
The proposed $1.6 billion general fund budget is part of a $2.39 billion spending plan for the county, which also accounts for money from so-called "special funds," which include state and federal aid.
Sun reporters Liz F. Kay and Nick Shields contributed to this article.