G.O.P. Says Balto. Co. Spends Too Much; Democrats Argue Fiscal Health Is Strong

… Election debate resounds with parties’ competing claims …


By Arthur Hirsch, The Baltimore Sun

8:39 PM EDT, October 30, 2010

The fiscal health of Baltimore County has become a major issue in campaigns for county executive and council, with Republicans claiming that the county is heading for crisis because of poor management and high taxes and Democrats countering that their party’s performance shows in the top rankings granted by bond-rating agencies.

The argument has unfolded through the primary and into the last days of the general election campaign in dueling budget figures, tax calculations, proposed remedies and interpretations of past sins and achievements. Independent policy analysts say some Republican claims hold up better than others, but they say it’s hard to argue that the county has been poorly run or to justify the frightful terms that one candidate has used to describe the situation.

“I’m one who believes the bond rating agencies are not always right,” said Roy T. Meyers, a political science professor at the University of Maryland, Baltimore County who serves as an unpaid member of the county’s Spending Affordability Committee. “But in this case, I believe they are. It’s an extremely well-run county.”

This year’s $2.6 billion budget — including $1.6 billion raised chiefly from county taxes and $1 billion from other sources, including federal and state grants — is balanced, as the charter requires. The budget reduced spending by 4.4 percent, closed a $160 million revenue gap by deferring capital projects and using reserve funds, and did not raise taxes.

Republicans — who were chiefly outsiders in a budget process run by Democratic County Executive James T. Smith Jr. and a County Council with one GOP member out of seven — say more cuts could have been made in this budget and argue that too much money has been spent in the past.

Democrats and Republicans alike have been warning about the potential county impact of money troubles at the state and federal levels, as state government seems poised to shift some public school teacher pension costs to the counties. The state’s balance sheets are also expected to suffer as federal stimulus money runs out.

The candidates for county executive talk about budget pressures in different ways.

Democrat Kevin Kamenetz, 52, of Owings Mills, a lawyer and four-term veteran of the County Council, says the council — which has authority to cut the executive’s budget but not propose spending — is always looking for spending cuts. He argues that if he’s elected to succeed the term-limited Smith, he’ll trim costs by making government more efficient, including technological changes that could potentially save money by enabling residents to do more of their county business online.

Those sorts of changes, county officials said, have made it possible to cut general government employees — not including public safety and the county jail — from 4,043 positions in 1987 to 3,711 today. A study released in 2008 by the Maryland Public Policy Institute showed that Baltimore County ranked 22nd among the 24 major jurisdictions in the state in local government employees per 100 private sector jobs, and in pay for local government employees.

Kamenetz pointed out that the budget was cut this year and last, and that the county has not furloughed or laid off employees. He issued a statement last week promising to hold the 18-year-old lid on property tax assessment increases at 4 percent, pledging to continue a “legacy of responsible fiscal management,” and reminding voters of his role in twice cutting the property tax rate.

Kamenetz said the prospect of assuming teacher pension costs is “obviously a great issue of concern for me,” but he said he would not speculate on what that cost might be or how the county would absorb it. He said he assumed the sum would be negotiated among all counties and the Maryland General Assembly.

Efficiencies could save millions

His Republican rival, Kenneth C. Holt, 59, an investments executive from Kingsville, warned in an opinion piece published in The Baltimore Sun in June that the county has avoided painful spending cuts in the past, but “the day of reckoning is fast approaching” with the loss of federal stimulus money.

He has been more specific about numbers, arguing that an array of “efficiencies” could save as much as $80 million, although he has not offered specific places where cuts could be made. He also urges the county to make itself more business-friendly by cutting some regulations and offering additional, temporary tax relief for businesses.

Holt — who touts the financial acumen he developed by running a small business, working for 25 years as a senior vice president at Morgan Stanley Smith Barney and a term in the Maryland House of Delegates, where he served on the Appropriations Committee — is proposing program expansions to foster economic development.

Holt’s budget critique is mild compared to that of his fellow Republican Steve Whisler, who is running for County Council in the county’s southwestern District 1. On his campaign website, Whisler, 42, of Catonsville, claims the county is “in a collision course with a ‘perfect storm’ of financial catastrophe.”

A retired Navy officer, Whisler, 42, said he has experience managing multimillion-dollar budgets for the Navy and in private industry, where he was vice president of the East Coast division of defense contractor KAB Laboratories. While he acknowledged “very little wiggle room” for cutting the budget, he said he would call for a spending freeze, looking for cuts in capital projects and more efficiencies in competitive bidding.

He looks at general fund spending that has risen from $1.2 billion to $1.6 billion in 10 years and says that’s too much. He looks at nearly $800 million spent on projects such as schools, libraries, community centers, roads and police stations and says that’s too much.

“It’s just irresponsible to have this huge, explosive growth in government spending,” said Whisler, arguing that in more prosperous times, the county spent where it should have cut taxes.

“We’re the highest-taxed county in the state,” said Whisler, arguing that the tax burden has discouraged business from locating in the county, which he blames for the high unemployment rate compared to surrounding counties.

The county property tax of $1.10 per $100 of property value — which has fallen by 4.2 cents in two cuts since 2002 — is second only in Maryland to Baltimore City’s.

“We’re just simply overtaxed,” he said.

Total tax burden is lower

Neil Bergsman, director of the left-leaning Maryland Budget and Tax Policy Institute, pointed to other figures compiled by the state Department of Legislative Services, which show that in fiscal year 2007, Baltimore County was sixth in total income and property tax burden behind, among others, Baltimore City, Harford and Prince George’s counties.

Fred Homan, the county administrative officer, noted that unlike some jurisdictions, the county does not charge fees for trash pickup or fire department costs and has no incorporated cities or towns with added taxes of their own.

Whisler’s Democratic opponent, Tom Quirk, of Catonsville, a certified financial planner, pointed to reports from the three major investor services — Fitch, Standard & Poor’s and Moody’s — that give the county a Triple-A bond rating, which means the county saves millions in interest payments.

In the most recent reports of last week, the agencies discuss the county’s “excellent financial management” and “consistent adherence to prudent debt policies.” In an interview before the primary, Quirk said he wants to continue those practices.

“It’s important to stay on the same path,” he said.

Both Whisler and Ryan Nawrocki, of Rosedale, the Republican running to represent District 6 on the east side, argue that bond ratings do not tell the whole story of county management. Nawrocki said there’s room to cut waste, and he gives as examples the county cars, $54,000 salary and generous pensions for the council, ostensibly a part-time job.

Homan, the administrative officer, said that years ago the county reduced its fleet by hundreds of cars, and does not allow police officers to take patrol cars home.

Nawrocki’s Democratic opponent, Cathy A. Bevins of Middle River, a former constituent services aide to Smith, also said she wants to stay the Smith course, and she cannot fathom the outrage of Whisler and others about the county’s financial situation.

“I don’t know what they’re jumping up and down about,” said Bevins.


Copyright © 2010, The Baltimore Sun

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