The County Commissioners reversed themselves yesterday, voting 2-1 to increase the piggyback income tax from 50 percent to 58 percent for the next six years.
The action restores $41 million to the county's six-year capital budget to build four new schools by the year 2001.
The construction plan was jeopardized Tuesday when the commissioners voted to raise the piggyback tax to 58 percent for fiscal 1996 only.
After changing their minds on the piggyback tax, the commissioners voted unanimously to adopt a $155 million 1996 budget that includes more money for schools without raising the county's $2.35 property tax rate.
The spending plan is 8 percent higher than this year's $144 million budget.
"It's a very tight budget for everybody," said Commissioner Donald I. Dell. "I'm not at all happy about having to increase the piggyback tax. But it's definitely for school construction and doesn't let the government grow."
With the county's school population expected to grow by 4,100 students, reaching 28,000 students by the year 2000, the question of using the piggyback tax to pay for new schools has proved especially divisive.
Over the past two days, Mr. Dell and Commissioner W. Benjamin Brown have squared off over the amount, duration and purpose of the tax increase.
On Tuesday, Mr. Dell refused to vote for an ordinance increasing taxes unless it explicitly stated that the money would be used for school construction.
But George Lahey, the county attorney, advised against targeting the tax revenues for specific uses because the money would be part of the general fund.
When Mr. Brown said he wouldn't reject the advice of the county attorney and Mr. Dell refused to support two alternative proposals to increase the tax rate, the commissioners instead approved a piggyback tax of 58 percent for one year only.
Commissioner Richard Yates refused to accept any increase in the piggyback tax rate.
Yesterday, before the commissioners adopted the fiscal 1996 budget, Mr. Brown announced that he was prepared to reconsider the issue of the tax increase.
"I think it's bad policy to disregard the advice of the county attorney, but the outcome will be even worse if we cannot build the schools we need to build," Mr. Brown said, before voting with Mr. Dell to increase the piggyback tax rate.
Under the ordinance adopted yesterday, the tax rate will increase from 50 percent to 58 percent beginning July 1, and will revert back to the 50 percent rate Jan. 1, 2002.
The tax increase will cost the average county taxpayer $120 next year, instead of the $150 under the 60 percent rate proposed two months ago.
Mr. Brown said Mr. Dell's insistence that the money be targeted only for school construction spending was unnecessary because the board of commissioners has authority over how the money will be spent.
"If we need to lock ourselves up and confine ourselves in a box, so be it," Mr. Brown said.
Mr. Dell said his refusal to accept the tax ordinance without a spending restriction was justified.
"I really was concerned that we get this money for what we designated it for," he said.
increase in the piggyback tax rate to 60 percent would have generated about $4 million for Carroll in fiscal 1996, and was to have been used to offset a projected deficit of $4.2 million.
From fiscal 1997 through fiscal 2000, eight percent of the tax increase would have gone toward school construction and 2 percent would have gone toward the county's operating budget.
Because the commissioners opted for an increase to 58 percent, the operating budget will be trimmed.
"The loss of revenue will be addressed through operating budgets over the next five years, not through the capital budget program," said Steven D. Powell, county budget director.
The largest portion of the county's operating budget -- $75 million -- will go to the school system, an increase of $2.25 million. Education officials had asked for $82 million.
By holding the county's property tax rate at the level it has been since 1990 -- $2.35 per $100 of assessed valuation -- the county will collect about $74 million. Income taxes will generate about $47 million.
The commissioners also approved increases in the county recordation tax and a variety of fees to generate $1.9 million in new revenue for fiscal 1996. The recordation tax will rise from $3.30 to $3.50 per $500 of assessed valuation on documents recorded in the county.
Fees will increase for several services the county provides to developers, including subdivision, storm water management and engineering reviews.
School construction projects dominate the $55 million capital budget the commissioners approved yesterday.
The $22 million allocated for school projects includes $7.4 million to build an elementary school in Union Bridge and $7.7 million for the new Oklahoma Road Middle School.
The budget also includes $900,000 for engineering and design work for elementary schools in Westminster, Manchester and Southeast Carroll.