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Fiscal future is looking strong Budget chief optimistic about county's growth


For years, Howard County Budget Administrator Raymond S. Wacks had a favorite chart for showing the county's fiscal fortunes: Tracking the growth of Howard's property tax base, the chart peaked during the boom of the 1980s, then slid downward throughout the '90s.

Until now.

Wacks unveiled the newest version of that chart to the County Council yesterday morning. Instead of trailing off downward, the end of the chart spikes suddenly -- signaling optimism about Howard's fiscal future for the first time this decade.

"The good news is that most of the bad news is over," Wacks told the council. "The bad news is it's not going to get much better than it is right now."

The dizzying growth of the 1980s -- when the tax base grew by 10 percent to 15 percent every year -- is unlikely to return in the foreseeable future. But county officials and economists agree better days are ahead for Howard, even if they disagree how much better.

Economist Michael Conte, director of Towson State University's Regional Economic Studies Institute, predicts sustained growth in housing sales and value in 1997. By comparison, this year's housing market started strong but has struggled since summer.

Driving the good fortune is job growth in Howard that has averaged 5 percent each of the past three years. Conte said the county's housing inventory also is shrinking and national interest rates may fall, which puts more housing in reach of buyers' means.

"Roses are coming up all over for Howard County," Conte said.

Mahlon Straszheim, economics department chairman at the University of Maryland College Park, also is predicting renewed growth in Howard's housing market and the county's economy generally.

"The county is doing very well, and there are a lot of people who tTC would like to live there," Straszheim said.

The property tax base -- the assessed value of all residential and commercial property -- affects virtually everything in county government: tax rates, road construction, class sizes in schools.

As long as the tax base grows, as it does during good economic times, the county can collect more money without raising its tax rate. When growth in the tax base falters, as it has during the 1990s, officials say the county must either raise the county's tax rate or cut services to balance its budget.

Howard's housing market stagnated during the 1990s, in part because of cutbacks in the federal government. Last year, a showdown in Washington closed the government temporarily, heightening economic uncertainty and slowing the flow of dollars from federal contracts.

In the past fiscal year, which ended in June, Howard County had a revenue shortfall of $3 million -- forcing last-minute austerity measures to balance the county budget. Having presided over a recession that forced deep cuts in almost every area of the budget, county officials now greet even good news with wariness.

"I'm cautiously optimistic," said County Executive Charles I. Ecker. "I think the slide has stopped, and you're going to see a leavening off now."

He also said that revenues -- including property and income taxes -- are coming in strong enough this fiscal year that another revenue shortfall is unlikely.

Howard reassesses all of its property on a three-year cycle, doing one-third of the county each year. Reassessments due this month include Elkridge, parts of east Columbia and the part of Ellicott City south of U.S. 40 and east of U.S. 29.

County officials say property values in east Columbia have changed little. But in Elkridge and parts of Ellicott City, property values are averaging 5 percent higher than three years ago, Wacks told the County Council yesterday.

The county phases in increases, meaning the average taxpayer in those areas will pay 1.7 percent more in property taxes each of the next three years.

Ecker predicted that the property tax base throughout the county will continue to increase at an average of 3 percent to 4 percent a year.

This is hardly robust growth, particularly compared to the 1980s when property values were leaping by more than 10 percent a year in some parts of the county. But even such modest forecasts are noteworthy in a decade defined by its fiscal problems.

"There is a great deal more optimism out there that the corner is about to be turned," said Richard Story, executive director of the Economic Development Authority.

Pub Date: 12/10/96

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