Like a fiery-eyed biblical prophet, Baltimore County budget director Fred Homan is an intense man with a tough, self-assigned mission -- changing old political habits in spending public money.
His target is the common practice of using one-time budget surpluses to pay for goodies that have long-term financial consequences. The favorites are cutting a few cents off the property tax rate, hiring new workers, giving county employees pay raises, or all three.
To call the budget director intense about the subject "is almost an understatement," said freshman County Councilman Stephen G. "Sam" Moxley, who recently got the lecture.
"We haven't generally gotten enough of this out on the table," Mr. Homan said in an interview. The practice worked for many years because the county's economic growth provided enough new tax revenues to replenish the coffers.
"We survived that stuff because we had healthy growth," Mr. Homan said. And if growth wasn't strong enough, he said, the property tax rate could be raised to make up the difference.
The most dramatic example of what he wants to avoid occurred between 1988 and 1992, when the county's large surplus was spent down to nearly nothing as revenues leveled off. By 1992, when the recession struck, the cupboard was bare.
Mr. Homan's message, delivered most recently to a meeting of the County Council's Spending Affordability Committee, is clear: The fast-growth, easy-money days are gone -- probably forever. As a result, he said, "You don't want to build things in that you can't pay for."
There are two reasons for the change.
First, the county is aging and its growth rate is anemic compared to years past -- so the one-time gush of new money from property and income taxes is down to a trickle.
Second, angry taxpayers have forced the county to adopt a 4 percent assessment cap and a near-automatic pledge from any executive that property tax rates won't be raised.
Those changes mean that one-time surpluses used to initiate long-term changes in county taxes or spending will automatically create a long-term budget hole.
"I don't want anybody forgetting that," said Mr. Homan, now in his fifth year as budget director.
The tall, bushy-browed bureaucrat's painful, inside view of what happened to the county government between 1988 and 1992 is the tale he uses to spread his gospel. He is making some converts.
"Everything he says makes a lot of sense," said Councilman Douglas B. Riley, a second-term Towson Republican who is a member of the affordability committee.
County Executive C. A. Dutch Ruppersberger III, a County Council member for nine years, said he, too, believes in Mr. Homan's approach. "I clearly agree," he said.
As Mr. Homan explained it, the county's problems began when a well-intentioned county executive, Democrat Dennis F. Rasmussen, spent large surpluses accumulated during his term on operating expenses, figuring growth or higher taxes would allow the county to keep up the spending in future years.
But revenue dried up, the surplus had been spent and the public cried out against higher taxes, leaving no way to pay the long-term bills. Mr. Rasmussen's attempts in 1990 to close the gap failed when the General Assembly refused to approve higher income taxes in exchange for lower property tax rates.
By that time, the county had at least 700 new employees who had been added during the late 1980s -- and paid for with one-time surplus money. But no new revenues were coming in, (( Mr. Homan said, and the county was left financially defenseless when the recession hit.
"We kept adding those layers and had to peel them all back," he said.
In fiscal 1988, the county's surplus was $79.3 million, or 11.5 percent of its $666 million general fund budget. By fiscal 1992, the surplus had dropped to $6.7 million, less than 1 percent of an $841 millionbudget. Revenues, which were growing at an 8.6 percent clip in fiscal 1988, actually declined by 2.3 percent in 1992.
Mr. Homan told the Spending Affordability Committee that if those one-time surpluses had been used for one-time expenses such as building schools or buying equipment -- instead of adding employees who have to be paid year after year -- matters would have been different.
The county would not have faced layoffs, he said, and using the surplus money for capital projects would have reduced the need borrow through bond sales. That, in turn, would have reduced the county's interest payments, which come out of the operating budget.
If some of the surplus had been put aside, it could have limited the damage from recessionary state budget cuts and reduced revenues.
When the recession hit, Roger B. Hayden, the Republican executive who had defeated Mr. Rasmussen, paid the political price for decisions that were not all his own.
L "That was awfully traumatic for the county," Mr. Homan said.
The total price was the elimination of 566 positions, cutbacks in popular libraries and senior centers, and the unprecedented layoff of 392 workers.
Angry employee unions turned against Mr. Hayden, fueling the public suspicion that the Republican cost-cutter had gone too far. Mr. Hayden lost his re-election to Mr. Ruppersberger, a Democrat who encouraged that suspicion in his campaign and won support from all county government unions.
Historically, the political tug of war over surpluses was fueled in part by executives who gave deliberately vague surplus estimates to the council.
Mr. Hayden changed that in 1991 by telling the council exactly what surplus was expected and by establishing a rainy day fund that now stands at $23.3 million -- nearly 3 percent of the county budget.
Mr. Homan said New York bond rating houses want local governments to maintain such funds in the 3 percent to 5 percent range.
Although the political consequences of Mr. Hayden's actions are fresh in politicians' minds, Mr. Homan still makes his point at every opportunity because he worries that the old ways may not be dead.
Last spring, for example, the budget director objected to a plan proposed by then-Councilman Melvin G. Mintz, who was running for executive. Mr. Mintz wanted to cut two cents off the property tax rate by using $2.9 million in predicted surplus funds that were destined for the county's new rainy day fund.
The council didn't go for the plan and events proved the wisdom of Mr. Homan's warning. At the end of the fiscal year, $2 million of the projected surplus evaporated because income tax revenues were lower than expected. Mr. Mintz's tax cut would have added to the $3.9 million deficit the county now faces and created future revenue losses.
In the end, however, the council gave in to election-year pressure and cut a cent off the county's $2.865 property tax rate. Mr. Ruppersberger derided the cut, saying the average taxpayer's $4 reduction was the equal of "two Big Macs with cheese."
But from Mr. Homan's vantage point, those Big Macs were expensive. The one-cent election-year tax cut cost the county $1.5 million in revenues this year, plus an additional $1.5 million each succeeding year.
Larry Carson is a reporter for The Baltimore Sun.