Recent revenue numbers are offering Howard County leaders glimmers of hope that tax collections are slowly improving, but that news comes amid fears that the General Assembly could shift teacher pension costs to the county.
At County Executive Ken Ulman's annual budget hearing at the George Howard Building, he and the county budget administrator, Raymond S. Wacks, confirmed that income tax revenues distributed by the state are up $10.7 million — or 14.1 percent — over last year, and added that the county had $3.85 million left when the 2010 fiscal year ended June 30. The income revenue rise is second-highest in Maryland, behind Calvert County's 17 percent.
Ulman said at the Tuesday night meeting that $3 million of that year-end surplus will go into a fund to help pay the huge bill for future retiree health benefits. The surplus is the result of cost-cutting during the year, Wacks said. By way of comparison with good times, the fiscal 2007 surplus was $38 million. Worse from Wacks' point of view is that property assessments continue to decline, meaning the county will get little added revenue from the property tax — its single largest source of revenue.
The small improvements must be considered against the fact that county workers have taken pay cuts for two years in the form of unpaid furlough days. They are due to be off between Christmas and New Year's Day. In addition, inflationary costs to the county for utilities, health care and energy could easily consume the revenue improvements, and then some.
In addition, the good news could easily be overshadowed by the teacher pension issue, which Ulman said could cost the county $24 million the first year and rise after that.
Still, Ulman told a relatively small crowd of advocates who came to the hearing to argue for county schools, Howard Community College, the library system and nonprofits that "I would not want to be in any other place than Howard County for its budget challenges." Other places, notably Montgomery County, are in much worse shape, he said.
The state still must deal with a $1.6 billion projected revenue shortfall and as the incoming president of the Maryland Association of Counties, Ulman said he'd be arguing that the pension costs stay with the state. They enhanced the benefit, approved the unfunded Thornton education program which encouraged better teacher pay, and local governments already pay Social Security costs for those pensions, Ulman said.
If the shift does occur, however, he said it would cause "very, very significant, tough, painful decisions that would affect everyone in this room."
If the pension cost shift occurs, it may be hard for the 36-year-old executive to keep to his comment during the campaign that he has "zero interest" in raising the property tax rate. Howard's income tax is already at the state's legal limit.
At the hearing, the pleas from the various agencies and groups were for more county money, or at least no further cuts. Only two ordinary citizens spoke. Michelle Parisi advocated for the county library's "Battle of the Books" program that her fifth-grade daughter likes, and 18-year-old Taylor Allen came to ask for resumption of Howard Transit service to River Hill, where he lives. He doesn't drive, he said, and needs the bus, which was cut for cost savings, to get to Howard Community College.
The college's president, Kate Hetherington, said the growing school needs $15 million to finish building a new health-sciences building, and would like $3 million more to plan a new building to house science and technology programs to prepare students for jobs in the growing cybersecurity field.
Kathy Rensin, chairwoman of the college's board of directors, said only 37.6 percent of instructors are full-time, "the lowest ratio ever." Harry Schwarz, president of the Association of Community Services, a group of over 100 nonprofit groups, pushed for raising the state alcohol taxes to provide more money for the needy.
Community leaders from Elkridge said the county must find sites for a new elementary and middle school, and eventually a high school, a cause Ulman said he supports.
"I totally agree we have a major issue. We've got to get ahead of this," he said, though noting the problem is less about money than it is about finding available land.
Next, Dr. Clarence Lam reeled off statistics on the growing need for food, utilities and eviction prevention funds for the Community Action Agency.
Library director Valerie Gross said the library is maintaining its high usage rate partly with innovation. The system began distributing 60 donated Barnes & Noble Nook electronic readers, each loaded with 34 popular novels, on Dec. 1, and there is already a 70-person waiting list