County Executive Robert R. Neall agreed last month to reimburse a tax reform group for legal fees the group incurred defending its proposed tax cap against a county court challenge.

A check for $20,000 was issued to the Anne Arundel Taxpayers Association May 29. The moneycame from the county's self- insurance fund and was approved by the committee that oversees the fund. The association had considered suing to recoup the legal fees.

The money went to Annapolis attorney John R. Greiber, who represented the group in a case that went to the Maryland Court of Appeals last year. Greiber said he had billed the group for more than $20,000 but accepted the county's offer because of its tight finances.

"I think it was a fair settlement," he said. "The current administrationis not going to revisit the sins of the past administration, and that's to Mr. Neall's credit. No one would have won in a lawsuit."

But two of the four citizens who had challenged the constitutionality of the association's proposed tax cap and a companion tax rollback measure disagreed with the settlement.

"He (Neall) ought to pay them something. They helped get him elected," said Ray Smallwood, MarylandCity's fire chief and one of the citizens. "Twenty thousand dollars is kind of cheap for an election.

"I could see it if we lost the lawsuit, but we didn't lose. Personally, I thought Anne Arundel Countywas in such dire straits, they ought to spread some of this money around to the communities. I have a real problem with it."

Former County Executive O. James Lighthizer directed county attorneys to represent the four citizens. The tax reformers, headed by Robert C. Schaeffer, had gathered enough signatures to place the issues on the November 1990 ballot. The Court of Appeals ruled that the tax rollback was unconstitutional but that the question on future tax growth should remain on the ballot. The tax cap was defeated in the November election.

"I would imagine Mr. Schaeffer must feel a little guilty about taking taxpayers' money," said Mary Rosso, another of the citizens. "Iwould urge Mr. Schaeffer to do the right thing and turn it back overto the county. His credibility is on the line."

But Schaeffer andNeall spokeswoman Louise Hayman said the county had no business suing the group. Schaeffer also said he could not afford to pay the fees himself.

"It simply is not fair to saddle the proponents of the property tax limitation amendment with the entire cost of defending it in court," Hayman said. "Citizens petitioned in good faith to place this issue on the ballot, and the Court of Appeals vindicated their right to put this on the ballot."

Neall opposed the tax cap when he ran for county executive last year. Since taking office, however, he has worked closely with the group. He met with members the night before he presented his budget and agreed to appoint a panel to look at reducing the property tax burden if the group would not oppose his budget. The council adopted the budget May 31.

Schaeffer and Hayman defended the working relationship Neall and Schaeffer have developed.

"We didn't get the time of day from Mr. Lighthizer," Schaeffer said. "For the first time since we got into business two years ago, someone's listening to us, and that's what we wanted. I didn't care for the budget, but he inherited a lot of programs he had to pay for, so we decided to suck it up for a year and see what we can do next cycle.As long as he's making an effort, we're not going to beat him up over it."

With the settlement, former county executive candidate Dennis Callahan said he has decided to drop a suit challenging the county's suit against the association.

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