Would Carroll County benefit more from cutting taxes or increasing funds to public education?
That was the question the Carroll County Board of Commissioners was left pondering Wednesday after finishing up its first day of deliberations on the Fiscal Year 2015 budget. The commissioners battled over whether they should increase contributions to Carroll County Public Schools and provide minimal tax breaks or offer larger tax cuts to residents and business owners without increasing school funding.
Commissioners Doug Howard, R-District 5, and Haven Shoemaker, R-District 2, proposed providing a one-time-only tax rebate of 1 cent per $100 of assessed value to property owners and lowering the local income tax, or "piggyback tax," slightly for one year. The resulting $2.2 million revenue loss would be paid out of the county's $12.6 million in FY13 surplus funds.
On the other hand, Commissioner Robin Bartlett Frazier, R-District 1, said she wants to lower the county's property tax rate 1 cent per $100 of assessed value instead of offering the one-time rebate. That tax decrease would cost the county $1.8 million. The board has already lowered the property tax rate 3 cents since being elected in 2010.
Frazier has voted against three county budgets in a row, arguing that not enough surplus money goes back to Carroll residents and business owners in the forms of tax cuts. Her goal, she said, is to lower the county's property tax rate 5 cents from what it was when she took office.
"I think we need to give the taxpayers back their share," Frazier said.
Howard said there's no real difference in offering a rebate over a tax reduction. Taxpayers will still get money back, he said.
"By using this one-time surplus to do that, what we do is not jeopardize any of the future, but we also don't gamble with any of the present programs," Howard said.
While he has proposed using surplus funds to pay for the tax breaks, Howard said there is no reason why the board couldn't offer a more substantial tax cut next year if the commissioners identified money in the budget to cut.
Ted Zaleski, director of the county's Department of Management and Budget, said if the board wants to cut spending at the same amount it lowered taxes, there are areas in the budget to do that. But, he said, there will be consequences.
"The impacts will start to be more obvious now," Zaleski said. "You're not going to cut very much that you're not going to say, 'OK, we're going to have to give up something that people are going to notice.'"
Commissioner Richard Rothschild, R-District 4, said he supports cutting taxes but not if it means reducing funding for education beyond the planned $162 million in FY15.
"If we're going to lower taxes, we have to have spending cuts," Rothschild said. "I want to make sure it's done responsibly."
The commissioners have planned to fund Carroll County Public Schools at $162 million in FY15 with an additional $4 million coming from the school system's fund balances. Howard and Shoemaker have proposed using county surpluses to increase school funding to $165.3 million with an additional $1.5 million coming from the school system's fund balances.
Superintendent of Schools Steve Guthrie has planned to ask the commissioners for $166.7 million in FY15.
Howard said his and Shoemaker's proposal would "fully fund" education.
Frazier criticized the Board of Education for having a $15.5 million surplus and asking for more money from the county. Any CCPS surplus funds should be returned to the county, she said, because they are "stewards of taxpayer dollars."
"If you're a teacher and you're not getting the supplies you need in your classroom and there's $5 million left over at the end of the year, I think it's a fair question to say, 'How come you didn't fund what I needed for my classroom but there is still $5 million left on the table?'" Frazier said.
Howard argued that the Board of Education is operating the public schools' finances in a fiscally responsible manner and stressed the importance that they have surplus funds. Those funds, Howard said, provide cushion for a school system operating on a $350 million budget.
"If they run out, what are they supposed to do? Come over here to this incredibly receptive board and say, 'Hey, we need a couple million dollars right away?'" Howard said sarcastically.
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Budget deliberations will be taking place over the next couple weeks. The commissioners have scheduled their next session to start at 1:30 p.m. Thursday.