An increase in the fire tax rate for all Howard property owners, record funding for education and a new initiative aimed at ending homelessness are all part of County Executive Ken Ulman's $899 million fiscal 2013 operating budget proposal released April 20.
Ulman's proposal to increase the fire tax rate follows the County Council's 4-1 vote last month to eliminate the two-tiered system that has residents in the east paying a higher rate than residents in the more rural west, outside of the county's metropolitan district served by public water and sewer.
The new countywide fire tax rate Ulman is proposing would be 17.6 cents per $100 of assessed property value. That is a 52 percent increase to the rate for property owners in the rural west, who have been paying 11.55 cents per $100 of assessed value, and a 30 percent increase for property owners in the east, who have been paying 13.55 cents per $100 of assessed value.
A home assessed at $400,000, for example, would cost the owner $704 in fire taxes under the new rate — $242 more for a homeowner in the west and $162 more for a homeowner in the east.
But property values, on average, have declined by 25 percent or more since 2008. County officials argue the proposed 17.6 cents rate would have most property owners paying about the same in fire taxes as they were before the real estate market collapsed.
"For instance, a typical home in Columbia was assessed for tax purposes at $512,200 in 2008 and is assessed at $396,000 currently," Ulman wrote in a letter to the council. "That home would have paid $694 in fire taxes in 2008 and would be charged $697 under this proposal."
In an interview, Ulman added: "We have continued to offer great service with dramatic reductions in revenue. Now we're asking people to pay essentially what they were paying several years ago for even better service."
The fire tax increase will help fund 32 positions for the new Glenwood station that will open this year and nine positions for a new paramedic unit that will serve Ellicott City and Columbia.
Fire Chief Bill Goddard said the new rate is "necessary to maintain the current level of service that we've been maintaining." He said the fire department has reduced its operating budget by $5 million since he started as chief in 2009 and will continue to look for efficiencies.
Kenny Livesay, a 41-year-old Cooksville resident and volunteer at the Lisbon fire station, said the proposed tax rate "is outrageous" and unjustified because of the fire department's "overspending." He explained the overspending as "equipment we don't need" and the more than $10 million spent to build the West Friendship fire station "when the volunteers of Lisbon are going to build one on just over $3 million."
Livesay, who is the son of former county police chief Wayne Livesay, also refuted county officials' argument that the increase is needed to make up for losses caused by declining property assessments.
"Anyone could have predicted this housing market fallout," he said, noting the government didn't prepare for it. "If anything was unseen, it was the spike, so the money should have been there."
The fire tax increase is the only tax increase Ulman is proposing.
He is not proposing any furlough days for county employees, as he did in fiscal years 2009, 2010 and 2011 to offset loss in revenues from the recession.
However, county employees still will not be getting any cost of living increases and roughly 60 vacant county positions will not be filled.
The budget proposal increases funding for the school system, community college and libraries by 2.7 percent.
The $526 million budgeted for the school system is the highest ever set aside for education and provides for 80 new teaching positions and expanded programming.
"We appreciate Executive Ulman's continuous recognition of the important role strong public schools play in enhancing the quality of life in our County," Superintendent Sydney Cousin said in a statement. "This budget allows us to respond to immediate economic challenges."
The fiscal year 2013 budget proposal is $28 million more than the $871 million operating budget approved for fiscal year 2012, a 3 percent increase.
"In almost all cases, it's growth because of fixed costs," Ulman said.
One of the few new initiatives in the budget is the Howard County Plan to End Homelessness.
In 2009, the county's Board to Promote Self-Sufficiency formed a committee to study the county's homeless problem and drafted a plan to solve it. Ulman's budget includes $366,500 to implement the plan, which calls for better coordination of existing services, such as housing subsidies, flexible financial assistance and addiction treatment programs, and better use of technology.
"I feel very strongly that it should be a priority to end homeless across Howard County ... and (Ulman) will find me an ally and strong supporter in (funding) that initiative," County Council member Calvin Ball, a Columbia Democrat, said.
Ulman said crafting the budget this year was "tough" because it is still unclear how the state budget will impact counties. The General Assembly adjourned before passing revenue packages it needed to balance its budget, thus triggering a "doomsday budget" that would make cuts to local education funding.
However, Ulman based his budget on an agreement reached by Senate and House representatives but never voted on by the full General Assembly. The agreement the conference committees came up would shift teacher pension costs to the counties, phased in over four years, and raise income taxes on six-figure earners.
"Our best information tells us they are going to have a special session to resurrect that agreement," Ulman said.
Using that assumption, Howard County budgeted for $9.8 million in teacher pension costs and $5.7 in income tax and other revenues. The county is able to absorb the $4 million difference from growth in its own revenue sources, Ulman said.
"Income tax is still a growing revenue source, although property tax is flat," he said.
The county budget is mostly funded through the general fund, which is where tax revenues and other fees go once they are collected. The general fund portion of the budget is $899 million.
The total budget, which also includes funding from the state, grants and other sources, is roughly $1.54 billion.
The operating budget has to be approved by the council, which can cut spending and move funds around but cannot add funding.
The council will hold a public hearing on the proposed operating budget (excluding education) Monday, April 30 at 7:30 p.m.