Budget woes fixed in counties as Baltimore struggles

Suburbs hold the line on taxes, rely on furloughs, capital delays

May 30, 2010|By Larry Carson, The Baltimore Sun

Despite big revenue shortfalls, Baltimore-area counties seemed to breeze through their financial travails this spring, shifting money around, avoiding layoffs and tax rises and plugging holes in the coming year's budgets in ways that few residents will notice.

Meanwhile, Baltimore City officials continue to bicker over a proposed package of $50 million in new taxes and $70 million in budget cuts likely to lead to at least 250 layoffs. Although the fiscal year ends June 30, city officials have yet to settle on a spending plan for the year that begins the next day.

While every jurisdiction is facing revenue declines as a result of the national recession, this year's budget season illustrates how the city — with its smaller tax base, greater pockets of poverty, already high property tax rate and more critical needs for public safety forces — has a harder time making up those deficits.

Mayor Stephanie C. Rawlings-Blake gets sympathy from surrounding county executives who have balanced their fiscal 2011 budgets while she still is trying to manage the same feat. As one county executive says, she's had less time to wrestle with the issues, coming into office just three months ago after the forced resignation of her predecessor, Sheila Dixon.

"Stephanie had to take office in the middle of the whole situation," Harford County Executive David Craig, a Republican, said about Baltimore's Democratic mayor. "In February when she was sworn in, I was making final [budget] decisions," he said.

Craig faced a $12 million revenue gap this fiscal year, but he eliminated it with five furlough days, 34 layoffs and no pay raises for county workers. For fiscal 2011's budget he postponed equipment replacement, canceled training, and held vacant jobs open, which allowed him to lower the county's property tax two cents for fiscal 2011. For the the first time in 37 years, the county met the so-called constant yield tax rate that produces the same amount of revenue as the previous fiscal year. His no-layoff, no-furlough budget was approved by council members unanimously.

"It was probably the easiest budget to get approved by the County Council, but one of the hardest to create," Craig said.

Baltimore County Executive James T. Smith Jr. made eliminating a $162 million gap look easy. He took $118 million in cash from capital projects that could be delayed, and $40 million from health insurance savings, plus $4 million from unspent monies and the rest from surpluses while also getting key public safety unions to agree to two years without raises and higher pension contributions in exchange for no layoffs.

Smith left his successor an $80 million cushion for fiscal 2012 and took off on vacation before the County Council took a final, unanimous budget vote Thursday to approve his plan.

"It wasn't about cutting services to citizens," said Don Mohler, Smith's spokesman. "Citizens won't see any drop-off."

But officials said that although the solutions may have seemed smooth on the surface, lots of hard decisions and years of earlier cuts and preparation went into them. "Two years ago, we made very difficult decisions" on employee pension reforms designed to cut future liabilities, Mohler said.

"We were able to bring it together without catastrophic things happening," said Ted Zaleski, Carroll County's budget director, about closing a $10 million budget hole this year. The county canceled some capital projects, and eliminated 93 county jobs.

In Anne Arundel County, executive John R. Leopold told employees to take 12 furlough days to help balance his budget, but he credited three years of cost-cutting for the lack of disputes this year. The cuts he did make came in areas not easily seen by the public, like savings in health insurance, and collaborative reductions negotiated with county unions.

Leopold also got unanimous council budget approval this election year, covering a $25 million gap in the fiscal 2010 budget and a projected $95 million revenue shortfall for fiscal 2011. "We slammed on the spending brakes," said John Hammond, Arundel's longtime budget director.

In Howard County, executive Ken Ulman plugged a $19.6 million shortfall before proposing a budget the five-member council approved 4-1 with little real controversy.

"We've been very strategic about the places we've cut," Ulman said, adding that he has cut other programs, such as cell phone expenses and take-home vehicles, to achieve savings.

In the city, crafting a budget and getting it passed has gone less smoothly. Rawlings-Blake initially produced what has become called a doomsday budget, a spending plan that, without new sources of revenue would have required massive cuts to police, fire and other essential services.

Then she introduced a $50 million package of new or increased taxes, which she said would lessen the blow, but the City Council has resisted passing it as proposed. Instead, some members have offered alternatives, and negotiations over the budget continue.

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