Austerity Pays Off

Our View : While Peers Face Layoffs And Furloughs, County Executive Jim Smith Demonstrates The Benefits Of Both Cautious Frugality And Careful Planning

April 16, 2009

While grasshopper-like neighboring jurisdictions happily let their budgets grow last year, Baltimore County chose the ant-like approach of austerity. No cost-of-living adjustments were given to most employees. Certain benefits were diminished. Unhappy teachers picketed in Towson, and some staged work-to-rule protests.

This week, County Executive James T. Smith Jr. was the happy one surviving the economic winter in relative prosperity. His proposed $2.56 billion budget, although slightly smaller overall than last year's spending plan, will provide county workers with a cost-of-living increase. Teacher salaries will rise 3.5 percent.

The grasshoppers? Many are now contemplating salary freezes, layoffs and furloughs. Some are likely to seek waivers so they won't have to fully fund public schools, something that hasn't happened since counties were first given that option a decade and a half ago.

The contrast could not be more pronounced. But to achieve what Mr. Smith has done required not only a formidable amount of fiscal discipline built on policies of years past but some favorable circumstances - the county's relative wealth, its slow growth and stable property values, and the federal stimulus package (if only because it prevented far deeper cuts in state spending), to name just a few.

But don't expect Mr. Smith to show a lot of gratitude toward lawmakers in Annapolis, who reduced state aid to the county by $39 million, the most of any subdivision in Maryland. His budget absorbs that cut, in part, by offering virtually no expansion of county services of any kind.

It wasn't some accounting gimmick but financial caution that ultimately made the difference. The county's long-standing 4 percent cap on real estate assessment increases means Baltimore County will receive $55 million more next year from real estate taxes despite the economic downturn.

And it helps that the county diverted much of the extra tax revenue earned from real estate sales during the boom years directly into one-time capital expenses such as renovating schools instead of ongoing government programs. The nearly $1 billion spent on school construction over the last five years is now paying off in the form of lower operating costs and less capital debt.

County employees have made sacrifices as well, as the county has reduced pension and retirement health benefits to make them affordable.

Baltimore County residents don't expect the extras that some affluent counties embrace, such as showplace schools, new concert halls or ambitious health care programs. Most reflect a Sam's Club sensibility and tend to view their county executive as a fellow skin-flint. It's a reputation many in Towson expect the lifelong county resident to tout as a candidate for Maryland comptroller next year.

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