Howard County's treasury is filling up with slightly more money than expected again this year, pleasing politicians eager to keep taxes down and still satisfy growing school board requests.
Ray Wacks, county budget director, briefed the County Council yesterday, painting a cautiously optimistic picture of rising revenues and another surplus.
But Wacks repeated his warning that the bulge is mainly the result of higher capital gains tax revenues from inflated stock market prices -- a bubble that may burst. "This is where we like to see our revenues -- slightly ahead," he told the council, adding however, that "this is a very tricky one to predict."
Through January, he said, property tax collections are up 4.4 percent over last year, and about $1.4 million, or nearly 1 percent, over predictions. Income tax revenues are up 7.9 percent over expectations, or about $2.6 million, but Wacks warned that state officials predict a downturn in capital gains revenues this year.
Because of continued low interest rates, real estate taxes are still growing, with recordation tax revenues up 25 percent, or $1.2 million, over predictions, and transfer tax revenues up 28 percent, or $500,000, over predictions.
Virtually every tax revenue -- from amusement levies to highway user taxes based on gasoline sales -- is even with or slightly higher than predicted levels, indicators Wacks said show that things are going well.
"Right now, our revenue picture is very good," he said. "We're projecting a strong surplus again," he said, refusing to predict a specific number because the situation is "too elastic."
The challenge, he said, is to keep what may be one-time extra funds from being used to create long-term, recurring debts. That can be done by using the money for bricks and mortar projects -- one-time expenses that help reduce the county's debt load and thus the interest paid on loans. "That means more money for other purposes," he said.
"I'm hoping we can do better by the schools than we did last year," council Chairman C. Vernon Gray, a Columbia Democrat, said after hearing the news.
Last spring, Gray opposed cuts to the school budget by former Executive Charles I. Ecker, who also cut the county piggyback income tax from 50 to 48 percent of the state tax.
This year, the schools are seeking $16 million more in county funds, plus any pay raise that the teachers negotiate. The school board is to vote on the education budget Tuesday.
Gray noted that the income tax cut will mean $5 million to $6 million less in revenues in the fiscal year starting July 1, regardless of the stock market.
"Hopefully, they'll have some education money left over," Gray said.
Christopher J. Merdon, a freshman Republican council member from Ellicott City, said, "All of our goals are to meet the education [needs] as best we can. We will be able to work with the board."
Mary C. Lorsung, a Columbia Democrat, also was hopeful, but cautious.
"It's good news, but as someone who doesn't play the stock market much, there's an uncertainty you don't like to have."
Pub Date: 2/18/99