Toting surpluses, officials put regional spree in sight Construction, tax cuts, purchases planned


In Baltimore County, alleys -- some so pockmarked that garbage truck drivers are afraid to venture down them -- would get paved for the first time in decades.

In Montgomery County, the property tax rate would drop by 2 cents and a car phone tax would be repealed.

In Queen Anne's County, a 30-year loan for a new library branch would be paid off in one year.

Throughout Maryland, county officials are finding money to fund long-neglected projects, reduce debt and, in several cases, offer taxpayer relief in their 1998-1999 budget proposals.

Sound like an election year?

It is, but that's not the main force driving the good times. A booming economy has created jobs and made Wall Street soar, boosting local tax revenues to levels not seen since the 1980s -- especially for growing suburban counties. And that means it's harder for officials to say no to a new school roof, new computers or a new road.

Many county officials predict they will end the current fiscal year with tax revenues 3 percent to 7 percent above budget. Some examples: Baltimore County forecasts an extra $23.4 million above budget; Anne Arundel, $12 million; Howard, $8.4 million; Carroll, $3.6 million; Harford, $2.9 million.

Baltimore City, whose population is declining, also has seen tax revenues jump. It will end the year with about $10 million extra in its coffers, primarily because of increased revenue from income and property taxes.

These amounts come in addition to the surplus previously budgeted by each locality.

"It's the biggest that I can recall in five or six years," said Douglas D. Browning, comptroller and finance director for Frederick County, which expects $7 million above its budgeted surplus.

To put this trend in perspective, consider Montgomery County. During the height of the recession in the early '90s, the county ended one fiscal year with a surplus of little more than $1 million on a $1.7 billion budget. This year, the county should receive $64 million in extra revenue -- part of a surplus of about $124 million on a budget of about $1.9 billion.

What will localities do with the extra cash?

Savings and rebates

Budget directors prefer to sock some money away. Carroll County, for instance, will not benefit from this year's extra cash for two years. Its spending guidelines require that surpluses be the foundation of future budgets.

In some counties, part of the extra money will go back to taxpayers. Officials in Queen Anne's County, for example, have proposed cutting the property tax rate by 6 cents to $2.19 per $100 of assessed value.

Montgomery County Executive Douglas M. Duncan, a Democrat, has proposed $13.8 million in tax relief. If council members approve his plan, the county will cut the property tax rate by 2 cents to $2.54 per $100 of assessed value, repeal a tax on cellular or wireless phones and accelerate the Homeowners Tax Credit program.

Howard County Executive Charles I. Ecker, a Republican running for governor, has proposed dropping the piggyback tax from 50 percent to 48 percent.

Anne Arundel County Executive John G. Gary proposed a 2-cent cut in the property tax rate Friday because the county's tax cap required it. The tax relief was not related to the county's extra revenues.

If officials don't cut taxes, they're offering the next best option: no tax increase. And all area localities are finding they have a little more cash for special projects or purchases -- the best way to spend surplus funds, budget directors said.

Baltimore City's windfall, for example, will fund a number of projects, including a new firehouse and roof repair on housing for the elderly, said budget director Edward J. Gallagher.

"I think the most important thing to remember is that you don't make long-term commitments because of short-term gains," said Fred Homan, director of budget and finance for Baltimore County.

Many governments learned that lesson the hard way in the '80s, Homan said. Enriched by large surpluses, Baltimore County funded raises, new programs and other expenditures that would increase spending for years to come. When the recession hit, the county was forced to make cutbacks and layoffs.

Now, Baltimore County is pouring money into one-time expenditures, including $38 million for schools, $2.5 million for breathing apparatus for firefighters, $4 million for agricultural preservation.

The county will also put an additional $4.3 million into an alley paving program. The $11 million program is partially funded by homeowners, each of whom will pay $750 over 15 years for the paving.

Harford plans to plow its extra revenue into the schools for books, computers and other equipment. Anne Arundel also targeted its extra money for school needs.

Approvals pending

None of the tax cuts or expenditures is final until the budgets are approved by local leaders. During the next few weeks, localities will hold hearings so residents can offer their views on the proposals.

Despite the apparent windfall, officials are wary of such good times.

"Our concern is that income gains can go away as quickly as they go in," said Raymond S. Wacks, budget administrator for Howard County.

Wacks said his department anticipated high income growth this year, but not as high as it turned out to be. The trick will be to budget accordingly in the 1998-99 fiscal year, he said.

Added Baltimore County Council Chairman Stephen G. Sam Moxley: "The economy is a pendulum. When is it going to swing the other way?"

Pub Date: 5/07/98

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