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Baltimore County executive proposes county's first income tax increase in nearly 30 years

Baltimore County Executive John Olszewski outline his budget cuts for the county. (Kevin Richardson / Baltimore Sun video)

Baltimore County Executive Johnny Olszewski Jr. is seeking the county's first income tax increase in nearly 30 years — plus new fees on development and additional charges on residents' monthly cellphone and cable bills.

The move is a marked turn from decades of political tradition in the suburban county, where executives have made it a priority to hold the line on taxes. The county last raised its income tax rate in 1992.

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Olszewski presented his $3.4 billion budget plan Monday morning to the County Council, saying the county is "at a crossroads." The Democrat, elected in November, said the county needs the increased revenue to close what was projected to be an $81 million deficit.

"I know how hard county residents work for the money they earn," he said. "But I believe our residents understand that investing in the future requires us to make these hard choices."

But some members of the County Council called the proposal a tough sell — especially because it doesn't provide enough money to start construction on new high schools for Dulaney, Lansdowne and Towson. While the spending plan includes planning and design funds for Lansdowne, Olszewski said in an interview that the General Assembly's recent failure to pass the state Build to Learn Act was a huge blow to the county's construction plans.

Councilman David Marks, a Perry Hall Republican, said his constituents "are furious that school construction projects are delayed because of the state."

"They're now being asked to shoulder an income tax increase without any schools being advanced this year," Marks said. "I think they're going to be very upset."

Council Chairman Tom Quirk, though, said Olszewski was taking a long-needed action.

"This is something that the county has really sidestepped for the last 20 years, and especially the last four or five years," said Quirk, an Oella Democrat. "This is what we have to do to keep our county on strong footing."

The tax proposals would need the approval of a majority of the seven-member County Council, which has four Democrats and three Republicans, to be enacted. The council must adopt a budget by June 1.

Olszewski wants to increase the local income tax rate to 3.2%, from 2.83%, saying that would bring the county in line with its neighbors. Both Baltimore City and Howard County have 3.2% income tax rates, while it's over 3% in Carroll and Harford counties.

The higher rate would generate more than $33 million in additional money next year, according to the Olszewski administration. They said a person earning $50,000 a year would pay an additional a $180 a year in income taxes.

A new cellphone tax — which would cost residents $3.50 monthly per mobile phone — would bring in an additional $29.5 million.

Olszewski is seeking other fee increases as well, including a cable fee to offset costs for public education and government channels. Verizon customers already pay such a fee, and the county is negotiating with Comcast now to add one for its customers. And he wants to raise the county's hotel tax rate from 8% to 10% — and impose that tax on Airbnb-style rentals.

Olszewski also proposed a new tax on residential and commercial development. So-called impact fees are common elsewhere in Maryland, but county leaders have resisted them until now. His administration estimates it would bring in about $7.7 million in the first year.

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Baltimore County Executive John Olszewski outline how the county can pay for his proposed budget cuts. (Kevin Richardson / Baltimore Sun video)

He said the money raised from the tax increases will help pay for 2% cost-of-living raises for teachers and county workers, put more counselors, special education professionals and English as a Second Language teachers in schools, build new sidewalks and bike lanes, and expand the county's community college scholarship program. It also will help begin to restore a fund set aside for retiree health care costs, he said.

Olszewski has proposed eliminating 17 "redundant" positions in county government. But he wants to create new top jobs, including a chief diversity officer, an opioid strategy coordinator and a sustainability officer who would address climate change.

Councilman Todd Crandell, a Dundalk Republican, who said he is "a pretty solid 'no' on a tax increase," called the diversity and climate change positions unnecessary.

"We have existing departments that should be charged with those responsibilities," he said. "So I don't see the need for us to be growing government and to ask the taxpayers — hardworking taxpayers — to pay for it."

Olszewski said his administration also found $20 million in savings, including a $1 million cut from the schools' laptop program by stepping back from the one device per child standard in early grade school.

He wants to keep the county property tax rate at $1.10 per $100 of assessed value, which it has been since 1988.

Olszewski's proposed budget increases county spending by more than $115 million above this year's — and roughly $44.7 million of that goes to the schools.

Olszewski did cut the school budget request by about $90 million, but still gave schools $32 million more than the minimum the county is required to fund.

"It leaves us overall with a lot more resources and staff than we currently have," said George Sarris, the school system's director of fiscal services. "It is a very positive budget."

Interim Superintendent Verletta White had asked the county for a much larger increase than in past years, saying that it was what the school system needed. The school board subsequently added more on top of that aggressive request, despite Olszewski's pleas that the board slim down the budget.

The county executive cut $26 million from the proposed budget that would have paid for extending the school day by 15 minutes, a move the state has been pressing the school system to do for years.

But with $32 million more from the county and $22.6 million more from the state as part of the Kirwan Commission recommendations for teacher salaries and special education, the schools are getting more than half of White's original request.

The schools will add 50 special education teachers and 21 teachers for students whose first language is not English. The school system also will be able to add staff to help students who need extra support, including 16 counselors, 15 social workers and four psychologists.

In an interview with The Baltimore Sun, Olszewski said he needed to "fix what's been left to us."

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While he didn't mention the late County Executive Kevin Kamenetz by name, he said the county was not transparent in the past about its financial situation — and that false promises were made to residents about how quickly the county could build new schools.

"The transparency and clarity that I think our residents deserve, they didn't get," he said.

During his budget speech in Towson, Olszewski pointed to a footnote in the current budget book, which said "a sizable infusion of new revenue" was expected to be approved this year — or the county would need dramatic reductions in services.

Quirk, the councilman, said he spoke "many times" to Kamenetz about raising taxes, but that Kamenetz's aspirations to become governor "gave him pause to do this."

"I don't think that's any secret," Quirk said.

Residents Monday reacted to the proposal — and the politics behind it.

"You don't solve every problem you have with just a tax increase," said Parkton resident Scott Macdonald, an unaffiliated voter. "Why is this the answer?"

Macdonald said he felt Olszewski was placing blame on Kamenetz, which didn't sit well with him.

"There's no one to defend the past administration," said Macdonald, a manager with a plastics company.

Pete Fitzpatrick, a Catonsville resident and former school board candidate, said he believed the tax increase is needed for the services that county residents expect.

"Tax increases are never popular, but I think that the county has made a case for it," said Fitzpatrick, a Democrat who works as a flight nurse.

Baltimore Sun reporter Liz Bowie contributed to this article.

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