Giving county tax cap a little room to bend


THE SPIRIT of compromise was absent in Anne Arundel County when the tax cap was debated at the start of this decade.

Robert C. Schaeffer and his Anne Arundel Taxpayers Association scolded then-County Executive Robert R. Neall for "bad leadership" during debate on the issue in 1992. "The good guys won," Mr. Schaeffer gloated after the electorate voted in the cap.

As the decade winds down, perhaps some welcome conciliation is on the way.

During a forum convened last week by the West Anne Arundel County Chamber of Commerce to reflect on the tax cap after seven years, Mr. Schaeffer praised the fiscal performance of Mr. Neall and another former county executive, John Gary. He said his taxpayer organization was open to discussing ways to alter the cap formula.

Out in the open

Just the fact that a forum was held on the issue seemed significant. Local elected officials have long been reluctant to oppose the cap, even while privately grousing about its debilitating impact on public services.

Mr. Schaeffer's political muscle may not be what it was; he lost a race for the Maryland House of Delegates in November 1998. But his taxpayer organization is likely to play a role if the cap is to change.

Perhaps some people are beginning to realize that limiting the income of government in a growing county will cost them services they need and want. School buildings and facilities alone need an estimated $400 million in repairs.

The county auditor estimates that the cap has cost the county $40 million in revenue since its inception. That money cannot be recovered.

Voters overwhelmingly approved the tax cap in 1992, two years after rejecting the idea. The measure was approved during the height of anti-government sentiment when many constituents felt that government was too big, sluggish and wasteful.

Fiscal hands tied

But since taking effect, speakers said at the forum, the cap has limited the county's ability to respond to needs despite good economic times.

County taxpayers cannot ignore the need to spend for services such as education, public safety, health inspections and water and sewer, even if they don't use all of them personally.

At the forum, County Council Chairman Dan Klosterman pointed out that three-quarters of county residents don't have children in the school system. "I wonder if that has something to do with people wanting to keep the tax rates down," Mr. Klosterman said.

It doesn't take a revenue cap to reduce government. Voters have always had that power: They can elect officials who want to hold down taxes.

For now, however, it appears the tax cap will be around in some form. Some doctoring may help. All the forum speakers called for modification.

"Clearly, the county is not as free or flexible to respond to changes as it once was," Mr. Neall said.

"When the economy's good, things pick up and move ahead. The tax cap almost encourages you to grow," he said.

That's because the county becomes desperate to generate revenue to fill in the budget troughs caused by the cap. Mr. Neall said, "We're like a cat chasing its tail because growth is going to stimulate additional demand for the future, and you never get caught up."

Diet plan for the county

Mr. Gary described the tax cap as a necessary diet for the county but said it was a mistake to continue to base the revenue limit on the Consumer Price Index.

In recent years, low inflation has sharply cut into property tax revenues and has required county leaders to make choices more difficult than they should be in these good financial times.

Things could worsen when the business cycle turns and the other sources of revenues subside.

Rethinking the tax cap is a good idea. Even supporters acknowledge the harm in its inflexibility. Voters may not be ready to end it, but they may want to bend it.

Norris P. West is The Sun's editorial writer in Anne Arundel County.

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