Harford County budget surplus allows for employee bonuses

$32 million will also fund capital projects

October 27, 2011|By Jessica Anderson, The Baltimore Sun

Harford County Executive David R. Craig announced Thursday that officials had amassed a $32 million surplus, allowing him to buck a string of budget cuts in neighboring jurisdictions and recommend giving all county employees $1,250 bonuses.

The gesture toward 7,000 teachers, sheriff deputies and all other county workers is in sharp contrast with other counties and Baltimore City, where services are being curtailed amid tough economic times.

Craig attributed the budget surplus to careful fiscal management and an increase of income tax receipts from job growth in the county because of military base relocations and new businesses. He complimented his department heads for recognizing that changes needed to be made early to avoid potential budget shortfalls.

"We saw this early in 2008," resulting in reductions, he said. "We made a big adjustment midyear to conduct savings and be more efficient," he said in an interview after Thursday's announcement. "We were ahead of the game."

The transfer funds for the employee bonuses requires approval from the County Council, which is supposed to introduce a bill Nov. 1. The council will hear public testimony Dec. 6.

If the County Council approves the measure, employees will receive one check for $625 in December and a second check the last week of June.

In 2009, Harford had a week of furloughs for county employees, not including teachers. The following year, the county had a hiring freeze. For the past three years, employees have had wage freezes, and they've had to absorb a portion of their health care and pension costs.

"Employees have had no pay increase," despite efforts through snowstorms, hurricanes and an earthquake, Craig said.

He said his administration would like to return to pay and step increases for county employees once growth is sustained, but added that "we realize this is all of the money."

Other surrounding jurisdictions have not fared as well as Harford, and they continue to look for ways to reduce employee costs.

Slumping revenues and rising costs have affected budget decisions in Anne Arundel County. Last year — for the first time in two decades — the county laid off employees. In the last two fiscal years, the county has furloughed its 4,100-person workforce, equaling a 5 percent pay cut. Additionally, the county in fiscal year 2013 increased its property tax rate by 3 cents.

Baltimore City officials have indicated that they are facing the fourth significant budget shortage in as many years. Agency heads were instructed to pare 5 percent from their spending plans in an exercise to plan for the coming fiscal year.

The city has slashed police and fire pension benefits, instituted furlough days and trimmed services to balance its budget. And even as Baltimore girds for another grim fiscal year, the effects of the current budget have not yet become fully apparent. As many as 30 city recreation centers could close or be handed over to private parties by the end of the year when funding runs out.

Baltimore County Executive Kevin Kamenetz proposed an early-retirement incentive plan last month aimed at eliminating about 200 positions from the county's 8,000-person workforce. Officials say the buyouts would save $14 million a year, and they have left open the possibility of furloughs and layoffs.

Howard County officials say they remain cautious when filling essential positions. The county has about 70 openings. County employees have taken a dip in pay in the form of furlough days the past two years.

Harford County Council President William K. "Billy" Boniface said Thursday that he would like to see the county's financial reports and report from auditors to see "where the surplus is coming from" and to determine "how did we end up with this projected increase."

But Boniface, a Republican, said he supported bonuses. "We haven't been able to compensate our employees for three budget cycles. If there is any way we can help out these employees, they deserve it," he said.

Councilman Dion F. Guthrie, a Democrat whose district includes Edgewood and Joppatowne, said county officials will have to watch the revenue from real estate taxes closely, anticipating that dwindling home values will result in falling property tax revenues.

"We need to be a little bit more conservative," he said.

But he too supported an employee bonus: "The employees have taken it on the chin."

Councilman Richard C. Slutzky, a Republican whose district includes Aberdeen and Churchville, said, "We are certainly not going to overreact. As a council member, I can say we will be very cautious."

Craig said he would like to use the rest of the money for capital projects and for savings in anticipation of decreases in state funding.

Baltimore Sun reporters Nicole Fuller, Alison Knezevich and Julie Scharper contributed to this article.


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