Howard County’s spending could soon outpace its revenue, a new government report finds. A report from Spending Affordability Advisory Committee released last Friday says the county’s projected revenue growth “lags far behind requested expenditure growth.”
The committee warns of a potentially dubious financial future — though not immediately. Revenues in the county’s next six fiscal years are projected to increase on average by 2.2 percent annually, the report said.
But that modest growth level will not keep up with the county’s increasing expenses, the report warns.
“Without changes to revenues or expenditures, current patterns of spending are unsustainable in the long-term,” said the committee report. “Our elected officials have had to make and must continue to make tough decisions as it relates to the priorities for funding in our county.”
The school system in February requested $972.7 million to fund their next fiscal year. This proposal is record setting— $89.3 million more than last year’s budget. The report states that if the the county were to fully fund the school request, it would require the equivalent of raising median home property taxes by $750.
The burgeoning depletion of the fire fund has “already incurred a structural deficit due to a slowdown in the property tax base and increased staffing requirements for new stations to address service needs,” the report said, projecting it will go into a deficit by next fiscal year.
To remedy the situation, the committee recommended the county “examine taxes and fees that are not comparable with other jurisdictions.” Specifically, the panel suggested looking at increasing the fire tax increase, and also imposing a new ambulance fee.
It also recommended increasing the road excise tax rate, school impact fees and the transfer tax rate.
The committee also recommended prioritizing capital budget needs and limiting bond authorization next fiscal year to $70 million. Last year, the county authorized $97 million in bonds for various projects. There are currently $217 in unissued bonds, according to Holly Sun, the county’s budget director.
The committee also recommended all departments submit future requests that “support priorities but reflect this current fiscal reality and... find savings and innovative solutions to live within it,” the report said. “The [school system] should not be excepted from this.”
The committee was created under executive order by Howard County Executive Calvin Ball. Its members include Sun, school board member Jennifer Mallo, CEO of the Howard County Economic Development Authority Larry Twele and Lonnie Robbins, chief administrative officer. Other representatives include members of the Columbia Association, the Howard County Chamber of Commerce, the Community Foundation of Howard County and the Farm Bureau, among others.
County officials are currently working on the budget for the coming fiscal year, and in an interview last week, Ball said he had directed officials to cap the budget’s growth at 2 percent.
With the release of the spending affordability report, the county executive did not immediately say what recommendations he would embrace, but in a statement said the work “provides a fiscal roadmap for our county to make smart and sustainable investment decisions moving forward.”
“It is clear that uncertain economic times are ahead, and we must continue to be strong stewards of our residents’ tax dollars,” Ball said.