Harford's three main sources of income -- income taxes, recordation taxes and fees for licenses and other permits -- are expected to dropabout $2 million this year.

That decline is what prompted County Executive Eileen M. Rehrmann on Monday to freeze salaries in the nextfiscal year, which begins July 1, and to ask the Board of Education and Harford Community College to do the same.

Larry Klimovitz, director of administration, said a 4 percent cost-of-living raise, the amount given to the county's 1,163 employees for the past two years, would cost the county $5.6 million.

It would cost the county an additional $2 million to give step or merit pay increases, he said.

Because of the sharp drop in revenue, James M.Jewell, the county treasurer, said he expects to have only $400,000 in reserve by the end of the fiscal year on June 30 unless the countycan cut spending and save money by delaying capital projects.

Last June 30 the county ended the fiscal year with $16.5 million in reserve.

A look at the declining revenue:

* Recordation taxes.

The biggest drop, said Jewell, is being seen in these taxes, fees thatare charged for filing such things as court papers and other legal documents.

Records show Harford collected more than $6.8 million last year in recordation taxes. This year, Harford will probably collect about $6 million -- a drop in revenue of about 14 percent or $840,000, said Jewell.

Jewell said the money to make up the shortfall incounty income would come from $1.5 million in the county's general operating budget that has not been spent or assigned to a project.

That $1.5 million is all that is left of a $16.5 million surplus carried from last year's budget. About $15 million was spent on projects including $3 million for a new Fallston Middle School and $2 million for the Route 543 elementary school.

* Income taxes.

This revenue is collected from county residents' paychecks by the state and distributed to the counties. Jewell said the county will probably takein about $50.2 million in income taxes when the 1991 fiscal year ends June 30.

But the county's budget was based on a projected incometax collection of $50.6 million. That means Harford will fall short $469,000 in that category, Jewell said.

"A few more hits like that, and we're in serious trouble; $469,000 may not look like a lot of money, but it means the figure you base your projections on for the following year will be lower, too," Jewell said.

Income tax revenue has dropped because fewer residents are moving to the county, Jewell said.

"When the income tax revenues drop by that magnitude, it tells you a couple of things," Jewell said. "It tells you you're no longer getting that one-time boost of totally new income tax revenue froma new resident, and that residents who are already here will pay less income tax because of interest deductions for their mortgage payments."

* Fees for licenses and permits.

The budget was based on expectations the county would collect $1.4 million in that category, Jewell said. But as of Jan. 31, the county had received $600,000 -- an$800,000 gap the county would have to see closed by July 1 to meet the budget projection.

Jewell said a prime reason for the drop is that construction of new single-family homes has slumped.

Records show that as of February 1990, 197 building permits had been issued for single-family homes. As of February 1991, 92 permits had been issued.

Freezing employees' salaries for the next fiscal year starting July 1, in addition to the hiring and purchasing freeze already in effect, will help offset losses, Jewell said.

Personnel officer Randall J. Schultz said the average annual salary of a county employee inthe current 1990-1991 fiscal year, which ends June 30, 1991, is $25,658. That figure includes a 7.5 percent raise -- a 3.5 percent step increase over the previous year's salary and a 4 percent cost-of-living raise, Schultz said.

A 7.5 percent increase gives an employee earning an average salary a $1,931.85 raise, boosting the salary to $27,582.35.

Schultz said the 1,163 county-paid employees affected by the salary freeze include 324 who work for the Sheriff's Department, the State's Attorney's Office, the Board of Elections and the CircuitCourt.

Rehrmann's request that the Board of Education, the Harford County Public Library and Harford Community College also freeze employees' wages is sure to stir public debate.

This year is the final year of a three-year contract. It guarantees teachers and other school employees an 8 percent pay raise in fiscal year 1992.

Giving 3,257 school employees the pay raise would raise the Board of Education's 1992 budget $7.3 million, said William Rufenacht, director of finance for the Board of Education.

Rufenacht said the average county teacher's salary is $36,072. He said more than half of the county's1,880 teachers do not receive step increases. An 8 percent pay raisewould give a teacher earning the average pay a $2,885.76 raise, boosting the annual salary to $38,957.76.

Rehrmann said Monday the salary freeze would last for one year, but the county would try to avoidlayoffs.

She changed that projection Tuesday, saying if the economy improves by January, mid-fiscal year, employees could see salary improvements then.

"A lot of other counties are doing layoffs," Rehrmann said. "One of the things our employees have been going through is wondering, 'Is Harford going to be next?' I'm willing to do without furniture and without other things. My top priority is to make surepeople have jobs."


All figures in millions; for fiscal years running July 1-June 30

.. .. .. .. .. 1984.. ..1986.. ..1987.. ..1988

Surplus.. .. .. ..0.. .. 2.3.. .. 2.7.. . 11.2

Revenue.. .. . 72.7.. ..76.7.. ..84.3.. . 88.9

Total budget** 72.7.. ..79.0.. ..87.0.. .100.1

.. .. .. .. .. 1989.. ..1990.. ..1991.. ..1992*

Surplus.. .. ..15.5.. ..11.9.. ..16.5.. .. 1.5

Revenues.. .. 100.9.. .113.8.. .132.7.. .132.7

Total budget**116.4.. .125.7.. .149.2.. .134.2

* projected

** Unspent money from the previous year's general operating budget (surplus) + current revenue

total operating budget

Source: Harford Treasurer's Office

BY: Carol L. Bowers

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