$50 million borrowing limit urged


An advisory committee recommended yesterday that Howard County borrow no more than $50 million next fiscal year, a $7 million increase from last year that members hope would balance the desire for fiscal restraint with the need for new schools, road repairs and other construction projects.

The Spending Affordability Advisory Committee's figure was in the middle of the range that members considered. County Executive James N. Robey said yesterday that $50 million "is about my limit" but noted that he might exceed the recommendation by a few million if the essential projects require it.

"I need some wiggle room there," he said. "We'll obviously be taking a hard look at these capital projects and doing some serious prioritization."

Last year, when the committee recommended $40 million in borrowing, Robey added $3 million to pay for a central booking center at the county detention building. The County Council determines the final spending figure.

This time, he said, some key projects include school additions and repairs, a training facility for police and firefighters; and renovations to part of the aging Circuit Court building.

Though they want to see the wish list, county Republicans have misgivings about the recommendation to borrow $50 million. Recent economic downturns worry them.

"I don't want our budget to be based on wishful thinking," said Allan H. Kittleman, the county councilman representing western Howard. "I'm not saying I'm going to vote against $50 million, but I am saying I'm going to be very cautious. ... It can come back to haunt us."

Whatever number Robey proposes, it is clear that some asked-for projects will have to be cut. Officials would have to borrow $62 million to pay for all of the capital spending requests for next fiscal year, which begins July 1.

Raymond S. Wacks, the county budget director, said Howard benefited more than most places from capital gains taxes while the economy soared. Now it's being hurt more than most by the stock market declines. He expects an $18 million budget shortfall in the current fiscal year, largely because of lower-than-expected income tax revenue.

"In the long term, the county's in good shape," he said. "But we have our short-term problems that we have to work our way through."

The advisory group considered the capital gains question and understands that no one can accurately predict how quickly the economy will recover, said Pat Baker, a member who represented the PTA Council of Howard County. She said the committee based its recommendation on population, property values and infrastructure requirements, all of which are growing.

"We still need to keep building schools," said Baker, who lives in North Laurel. "We thought we were past the peak of that, but we're not. ... It's a balancing act. Hopefully we chose a good course. Time will tell."

Wacks is confident that Howard's property values will continue their steady rise and offer a solid tax base for additional borrowing through 20-year bonds. His calculations suggest that even with the recommended increase in borrowing, the interest payments will eat up a smaller percentage of county revenues.

If the county borrows $50 million next year and each year afterward to 2012, the interest payments would account for 8.2 percent of county revenues, according to Wacks' revenue assumptions. That figure now stands at 10 percent.

Still, some are concerned about borrowing more than in the current fiscal year because Howard County's $410.3 million debt is one of the biggest in Maryland.

Steven H. Adler, the Republican challenger for county executive, called on Robey to stay at or below the committee's $50 million recommendation. "There needs to be a very good reason to exceed that," he said.

Wacks said he considers $7 million - the difference between the committee's figure and current borrowing - a small increase. The county will end up paying a price even if it does not borrow, he said.

"There's a cost to not building projects, too," Wacks said. "There's a cost in quality of life and the effectiveness of the school system, and we have to balance those factors."

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad