Schools, libraries could suffer as counties face budget stress

Another lean spending year as property value declines catch up with revenues

April 10, 2011|By Larry Carson, The Baltimore Sun

Residents of Baltimore's suburbs could see another year of reduced services, as counties continue to feel pressure on two key sources of revenue: state aid and property taxes.

The fiscal strain could mean reduced library hours in Anne Arundel, more crowded classrooms in Baltimore County and economies like reusing old furniture in a new Carroll County school.

County employees, meanwhile, are facing more pay freezes, furloughs and, for some, perhaps layoffs.

"Fiscal year 2012 is the most serious and difficult challenge the county has faced during my tenure," said Anne Arundel County Executive John R. Leopold, a Republican in office since December 2006. Anne Arundel employees face 12 days of unpaid leave worth 4.6 percent of their pay,

The state government saw a more immediate effect from the recession, as sales and income tax revenue were hit hard. County governments, which depend more on property taxes, are just now hitting bottom.

"The largest driver of local government revenues is the property tax, and that's going to be flat for quite some time" because of falling assessments, said Howard County Executive Ken Ulman, a Democrat who is also president of the Maryland Association of Counties this year.

Harford and Carroll counties already have revealed plans that show minimal spending increases, and Carroll's commissioners want to cut the property tax rate. Some counties are seeing a glimmer of light in rising income tax revenue, while others are still facing serious shortfalls.

Cost shifts

County leaders are grateful they escaped the big hit they all feared — a shift in the burden for paying teacher pension costs from state to local governments. But the General Assembly still added to local government woes with a shift of other, much smaller costs.

For instance, counties must pay the administrative costs for those teacher pensions next fiscal year, and for two years must pick up 90 percent of the cost of running small state assessment offices in each county seat. After that, the local share would revert to half the cost.

State legislators also helped local jurisdictions by adding back $58.5 million in school funding and $13.2 million for local roads next fiscal year, but that won't make up for the reduction in state roads funding for counties that dropped from $555 million in fiscal 2007 to $134 million in fiscal 2012.

In Arundel, Leopold wants to cut $15 million from schools, and he's struggling to close a projected $75 million revenue gap despite a variety of belt-tightening moves. He's hoping slots revenue will begin to flow from the Arundel Mills mall casino by year's end.

Meanwhile county residents are worried about more cuts. Library patrons in Anne Arundel rallied during March at four standing-room-only meetings to advocate for the 10-library system.

Library spokeswoman Laurie Hayes said that over the past four fiscal years, the system has lost 16 percent of its budget, including 18 jobs and one-third of the money for buying new books and materials. Leopold requested another 10 percent cut in his next budget, a figure that would force all but one of the county's 10 branches to close on Sundays and possibly eliminate Friday daytime and Thursday night hours.

"A lot of us can't afford to buy our books at Barnes & Noble and Borders," said Tracy Gill, of Annapolis, who uses the Eastport Annapolis Neck branch. "The library is essential," she added because people go there who don't have home computers, and children do their homework there after school.

In Towson, newly elected Baltimore County Executive Kevin Kamenetz, a Democrat, is sticking to a school board decision to cut 196 teaching jobs to save $15.8 million, and faces other gaps such as a $9 million underestimate for school system health care and more than $7 million in state aid shifts to locals with surplus funds.

"The reality is that the economic recovery has yet to be felt," said Don Mohler, Kamenetz's chief of staff. He noted that the county spent $587 million in debt-reducing cash on capital projects between fiscal 2005 and 2010, but just $600,000 is available for fiscal 21012.

Fiscal 2013 looks no brighter, he said.

Still, given the overall fiscal woes, no local leaders were expecting major financial help from the state. Against that background, "we've been treated very well," said Michael Sanderson, executive director of the Maryland Association of Counties.

Generating revenue

"Probably the biggest issue around here is whether anybody is going to buy a house," Sanderson said. Homes provide the biggest source of local revenue by far through property taxes that are roughly half most local government's revenues, plus real estate transfer and recordation taxes..

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