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Holding on tax rate in Harford good public policy [Editorial]

Budgets and BudgetingCivil and Public ServicePersonal Income

It's easy to be critical of the government, any government, any time, but especially at budget making time.

That's because budget making time is when tax rates are set or adjusted, and often if they're adjusted, they're adjusted up.

It's also the time, at least at the county government level, when pay raises are pondered for government employees, notably teachers.

This year in Harford County, the tax issue isn't what will be drawing criticism; as proposed, the county budget for the year that starts July 1 will be balanced without increasing the property tax rate, or other tax rates or fees, for that matter.

Raises for county employees will not be forthcoming. There will, however, be step increases and the other adjustments afforded to employees of the local civil service, even as such pay increases aren't a foregone conclusion in the private sector.

Is there reason to be critical of the administration of Harford County Executive David R. Craig for holding the line on tax rates by being stingy with raises? It's probably a matter of perspective.

First, it's worth considering the realities of what the words "no tax rate increase" mean to the taxpayers. The one thing those four words don't mean is that tax bills will be going down. The $494 million general fund budget proposed by the Craig Administration reflects a spending increase of $6.3 million. As a percentage of the total, it's not much – an increase of roughly 1.3 percent – but, as has been observed many times when the subject is government spending, a few million here and a few million there and pretty soon you're talking about real money.

That extra $6.3 million isn't the result of pennies from heaven. When incomes go up and income tax rates are unchanged, the tax take increases. The same goes for other taxes when rates are held steady, but the size of the pie being taxed increases.

In good times, complaints about such incremental tax increases tend to be a bit muffled because they result from increased wealth. In bad times, there can actually be contractions in the amount of money a government collects – unless rates are changed.

Locally, Harford County has wisely resisted increasing tax rates to compensate for its diminished share of a diminished pie, and it has managed to do so with relatively little pain.

The sector that has felt what pain there has been, however, has been the county employee sector, and the most vocal part of that group has been public school teachers.

Substantial raises haven't been forthcoming in recent years, and the head of the local teacher's union is quick to point out that Harford County's teachers rank relatively low in terms of compensation, compared to teachers from other Maryland counties.

What typically isn't mentioned is that Harford County's teacher retention rate is generally well in excess of 90 percent from year to year and that Maryland ranks rather high when it comes to teacher compensation. In other words, Harford County teachers are paid at a low rate only compared to teachers elsewhere in Maryland, and a high percentage of Harford County teachers are pleased enough in their jobs that they keep them.

Certainly, teachers aren't the only government employees affected by the lack of raises in the coming year's Harford County budget – though some among them tend to be the most vocal about it. Generally speaking, however, Maryland counties pay fair salaries and offer decent benefits, and Harford fits that model for teachers and other employees, be they sheriff's deputies patrolling the streets or clerks at the permits office.

It has long been a truism of government employment that it doesn't suffer from extremes. Neither do people get truly wealthy working government jobs, nor are they obliged to live hand to mouth. In good times, complaints about the share of the pie allocated for government spending – and since government is a service-oriented enterprise and service requires people – a lot of that is spent on pay and benefits. Now that times are not so good – though there's reason to believe they'll be getting at least incrementally better in the next few years – it doesn't make sense to take a larger share of a smaller pot of money to pay for government staff raises.

Holding the line on taxes by keeping salaries in check has long been how businesses get through tough times; it should also apply to governments. When the economy gets better, and the size of the pie increases, is the time to provide raises.

Copyright © 2014, The Baltimore Sun
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