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Howard County Council members issue plan to cut spending, negate need for recordation tax increase

Three members of the Howard County Council introduced amendments Wednesday night to County Executive Calvin Ball’s proposed budgets that would cut more than $90 million in capital costs and $21 million in operating expenses.

David Yungmann, the sole Republican on the council, Deb Jung, the council chair, and Liz Walsh, the vice chair, proposed the operating budget cuts as an alternate solution to the $21 million in revenue the county said it needed to make up.

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“The county executive has to send down a balanced budget and [the County Council] can’t unbalance it,” Yungmann said. “We have to find the reductions as well.”

The progressive recordation tax rate — a one-time fee paid when real estate is sold to a new owner — was presented as the administration’s solution for that loss in revenue and introduced through May 4 legislation from council members Christiana Mercer Rigby and Opel Jones.

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“I’m incredibly disheartened that my colleagues are unnecessarily forcing austerity and harming the county’s ability to serve our community at a time when we should be investing in small businesses, creating infrastructure jobs, and revitalizing our neighborhoods,” Rigby said of the budget cuts.

More than two-thirds of Yungmann, Walsh and Jung’s recommended capital reductions come from funding for the county’s cultural center. They suggest the funding be put on hold for one year for a capital savings of $63 million in FY21.

“If you’re going to pick a year to stretch, this ain’t the year,” Yungmann said, referring to the coronavirus pandemic. “We had a month to understand [the cultural center project]. We really want to see this built, but we want to see it done right, we don’t want to rush into it.”

Ball recommended funding for the new cultural center in downtown Columbia on April 1. The center would be a new home for Toby’s Dinner Theatre and 180 mixed-income residential units, as well as artist and performing spaces. It would be primarily supported by issuing bonds that are backed by the incremental tax revenues from the Downtown Columbia TIF District.

Concerns from the county’s budget office during budget hearings on the cultural center focused on the low-income tax grant approved by the state for the mixed-income residential units. The county’s budget office was unsure whether the county could get an extension on the grant if the capital project were pushed to the next fiscal year.

“I know we’ll hear from those disappointed that their particular project might not proceed exactly as planned just six months ago. I get it,” Walsh said. “I know some of them will predictably frame these amendments as ‘against’ whatever their particular, singular issue is. It’s not. It’s bigger than that. We’re trying to do what’s right, for right now, for everybody.”

In early March, about two weeks before the coronavirus shut down the county, the Spending Affordability Advisory Committee released its fiscal 2021 report, warning that expenditure requests in the county are “considerably” outpacing growth. The report did not account for the pandemic.

The report makes annual recommendations to the county executive for the upcoming fiscal year on revenue projections, bond authorizations and long-term fiscal outlook. This was the second year in a row the committee warned about the county’s fiscal future.

The committee recommended general obligation authorization be limited to $70 million; Ball recommended $94.6 million in his proposed budget. Yungmann said part of the goal of introducing these amendments was to get the budget back in line with the $70 million recommendation.

“You don’t know how long it will take to get back to the full revenue base that we had,” Yungmann said. “Pre-COVID, Spending Affordability said we shouldn’t be borrowing any more than $70 million in spending bonds.”

According to the pre-filed legislation, other capital reductions recommended by the three-member alliance include reducing funds to road and sidewalk repairs, reducing funds to remodel the Detention Center and reducing funds to the Structure Inspection Program.

Although cuts can be seen throughout many departments, the police and fire departments remain fully funded in the amendments. There are also no changes to the proposed education budget.

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“I’m against committing finite county funds to unvetted or unnecessary projects in the midst of a potential economic free fall,” Walsh said. “Each of those new capital projects approved next fiscal year adds more, increasing operating expenses year after year after they’re built: for debt service, to heat and cool and clean and maintain, to staff. Unless a project is life safety or already paid for, I have a really hard time with it getting off the ground right this very minute.”

A budget vote is set for Wednesday.

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