Budget officials hate surprises - especially when they mean having to write big checks - which is why Howard County's fiscal watchdogs are a bit glum this week.
Two checks are scheduled to go out Friday for a combined $654,000 property-tax refund to Giant Food and Honeywell International for errors they made in the past several years in providing information to state assessment officials.
"It was a big surprise to me. You just have no idea when these cases are going to come to an end," said Sharon Greisz, deputy county finance director. Giant will get $207,000 and Honeywell $447,000, she said.
Raymond S. Wacks, county budget director, noted the case to the County Council last week to illustrate how hard it is to predict revenue each spring for the budget year, which starts July 1. He said Howard's revenue should increase by a healthy $35.5 million in the next fiscal year to $520 million as the council moves close to final decisions on the budget.
"This is a lot of money," Wacks said in telling the council about the refunds. He said fiscal surprises can work both ways. The county Health Department, for example, is expected to end up with an extra $1 million this year because of high staff turnover, but, Wacks lamented yesterday, "I already counted that."
Gary P. Duffy, assistant assessments supervisor for the state Department of Assessments and Taxation, said the errors occurred for different reasons in each case.
Like homeowners, corporations pay property tax on their buildings, which are called "real property." In addition, they pay business personal property taxes on the furniture, fixtures, equipment and machinery inside those buildings, Duffy said. Companies have up to three years to file appeals.
Giant Food, which has a large warehouse and distribution facility across the county, failed to delete old fixtures and equipment replaced over two years in 1998-99 and paid taxes for a bakery operation that is exempt as a manufacturing facility.
In addition, some items, such as computers, are permitted to be depreciated faster than the standard 10 percent a year. "The errors are primarily assets you see on the books but which are not physically at the locations," Dorsey said. "You see a lot of this in the retail industry."
Giant Vice President and spokesman Barry Scher said the refund is "very minor" and the result of the work of an accounting firm Giant hired to find these kinds of errors.
Duffy said Honeywell was entitled to a tax exemption allowed for research and development facilities but did not claim it for 1999. As a result of an appeal, its assessment dropped from $16.6 million to $10.4 million for that year, and by $300,000 for 1998, reducing its total tax bill for those years by $447,000.
"We're happy," said Joe Militano, spokesman for Honeywell. The company has a micro-electronics lab in Columbia called the Micro-involved Electronics Technical Center. He was not certain that that was the unit that prompted the refund.
Wacks said the tax refunds will lower the hoped-for surplus that usually turns up after the county's books are closed on a fiscal year. In recent years, Howard has collected up to $7 million more than expected when all the beans are counted.
"It's nice that the taxpayer has the right to fix a mistake for three years. That's a plus. But the county has to pay the money," Duffy said.