Spending Affordability

Baltimore County will likely pull from its reserves to balance the budget and stay within guidelines proposed this week by the county Spending Affordability Committee. With the county facing a $38.5 million revenue shortfall as it goes into budget deliberations, the committee recommended capping next year's spending plan at $1.63 billion in a report released Tuesday. The committee's guidelines would allow an increase of approximately $36 million over this year's budget, funds that could come from about $147 million in surplus money.

Prospects for rising income tax revenues are improving for Howard County, an economist told the county panel that will recommend spending and borrowing decisions for the next county budget, though dangers of a renewed decline remain potent. "For the next two years, off a low base of incomes, this county looks pretty good, we think," economist Anirban Basu told the county Spending Affordability Committee on Wednesday morning at the George Howard Building. "That doesn't mean the county should go on a spending frenzy … but things will be less worse.

Living in one of America's wealthiest counties may boost residents' morale, but that good fortune is bad news for Howard County's tax collectors, who predict that capital gains tax revenues will slow sharply. The current slump in stock prices is wiping out trading profits for the county's affluent residents, and that slowdown is expected to create a budget crunch as an election year looms. When times are good, prosperous Howard County - cited by the U.S. Census Bureau as having one of the highest median household incomes in the nation - often leads the state in capital gains income tax growth, but when the bottom falls out, so do those revenues, fiscal experts say. Capital gains revenues represent 10 percent of the county's income tax revenues, said Raymond S. Wacks, the county's budget director - but they are the difference between higher or flat revenues.

Maryland's Spending Affordability Committee found itself in a difficult situation. The group of legislators and a few outside experts is supposed to make a recommendation to the governor of how much the budget can increase in the next year without outpacing the growth of the state's economy. But with the economy still weak and the budget in a shambles after the end of the federal stimulus program, the committee would have found itself in the business of figuring out how much the budget should be cut, not how much it should grow.

Baltimore County will need to build flexibility in to its budget to prepare for teacher pension costs that could be passed on from the state to local governments, the chairman of the county's spending affordability committee said Tuesday. Gov. Martin O'Malley's proposal to shift some of those costs from the state is the major uncertain factor in the county's fiscal situation, said committee chairman Tom Quirk, a Catonsville Democrat and member of the County Council. It is not yet clear how much of the pension costs the county will have to absorb.

QUESTION ASpending Affordability CommitteeTo amend the Anne Arundel County Charter to establish a Spending Affordability Committee; specifying its organizations and functions; and specifying the number, terms, and qualifications of its members.QUESTION BPetitions for charter amendmentsTo amend the Anne Arundel County Charter to clarify that petitions for Charter amendments shall be filed with the County Council and that the County Council shall make copies available, in order to conform to State law.QUESTION CCounty executive's term of officeTo amend the Anne Arundel County Charter to clarify that the County Executive shall qualify for the office beginning on the first Monday in December following election or as soon thereafter as practicable; and making technical corrections.

A legislative oversight committee agreed last night that Gov. Parris N. Glendening's next budget should not grow by more than 4.9 percent, meaning that he should spend only $57.7 million of the state's surplus for existing programs.The Spending Affordability Committee recommended that Glendening's operating budget, which will be submitted to the General Assembly early next year, not exceed $7.985 billion for the fiscal year that begins July 1.The committee recommended that the governor put part of the state's projected $260 million surplus into reserve and use some for one-time expenditures such as school construction, for education and children's health programs, and for additional or accelerated tax cuts.

Maryland's continuing budget woes could mean that the state's 75,000 employees will have to go without a general salary increase for the first time since 1984.Both Gov. William Donald Schaefer and a legislative advisory committee said yesterday in Annapolis that a possible pay increase for state workers next year has been put in jeopardy by a growing shortfall in the current budget and weak signs of economic recovery ahead.State workers have received a 4 percent pay increase annually for the past three fiscal years.

County officials want to know how much government spending taxpayerscan afford.The Spending Affordability Committee, created by charter amendment last year to limit spending, will conduct three public hearings to ask citizens how much they can afford for government services."

Howard County Councilman C. Vernon Gray accused Council Chairwoman Shane Pendergrass of taking orders from the administration of County Executive Elizabeth Bobo and of slighting other council members.Gray, D-3rd, made that charge during the council's monthly meeting last week. He said Pendergrass, D-1st, should have told her colleagues of Bobo's plans to appoint the council auditor to her new spending affordability committee.Pendergrass was told about the appointment before the executive unveiled the committee last Wednesday during a news conference that Pendergrass attended.