Howard County will have $5 million to $7 million in unbudgeted surplus to spend next year, and it's all going for school construction projects, County Executive James N. Robey said.
The extra money, left over when the fiscal year ended June 30, is about half of last year's $12 million surplus. Robey said that's because he asked budget director Raymond S. Wacks to make his estimate as accurate as possible.
The accuracy of Wacks' estimate can be important in Howard because Robey can use anticipated revenues in budgeting next year's operating expenses. But county law requires unplanned surplus money be used for one-time expenses -- usually capital budget construction projects.
Last spring, Robey noted Friday, the County Council raised the property tax rate by 2 cents to get more money for school operations, while the $12 million surplus was reserved for one-time capital spending. The more accurate the revenue estimates, the more spending flexibility Robey will have at budget time in April.
"There were those who said we were too conservative in our revenue estimates last year," Robey said, so this time he asked Wacks to shave his estimate closer. "He did exactly what I asked," Robey said.
The higher surplus last year might have been partly the result of outgoing Executive Charles I. Ecker's desire to leave a large financial cushion for Robey's first budget. Ecker has said that when he took office in 1990, on the eve of a recession, his job was made more difficult by the deficit he found.
County officials also note that using surplus cash for construction projects means not having to pay interest on borrowed money, further improving the county's finances.
County Council Chairman C. Vernon Gray said budget projections "are an art, not a science" because of the many variables involved.
Capital gains windfall
Wacks said the county can credit capital gains taxes in the booming economy for the unbudgeted surplus.
"Capital gains went up more than I suspected," he said, noting that only Howard, Montgomery and Anne Arundel counties saw capital gains revenues rise in the state's income tax distribution last month. County auditors are working to determine exactly how much the surplus will be, Wacks said, noting that last year marked the largest surplus in at least a decade, while fiscal year 1991 marked the low point -- a $3 million deficit.
Wacks warned that "because it's only half of what [the surplus] was last year, it's going to be a challenging year. People have gotten used to big surpluses." He said the booming economy is slowing, and although no one is predicting another recession soon, "I think we are headed into a more mature phase of the growth period."
Despite the extra money available for school construction, Robey said the county can't afford the $51 million requested by school officials -- $16 million more than last year.
"I know there are tremendous needs, but to do it all in one or two years is too much," he said. The physical training building at Howard Community College needs renovation, he said, as well as other large capital expenses -- such as a new emergency radio system for county police and firefighters.
Funding the entire school construction request would likely absorb every capital dollar the county could muster, Robey has said.
Pub Date: 10/04/99