Howard Co.’s Bond Rating Intact, But Furloughs Still Possible

… County council gets mixed fiscal news …

By Larry Carson, The Baltimore Sun

1:29 PM EST, February 17, 2011

The pressures of the election might be over, but Howard County’s elected officials are looking at continuing fiscal pressures in what could be their toughest budget season yet as the county faces nearly flat revenue after more than two years of cuts.

County budget director Raymond S. Wacks told the County Council on Monday morning that revenue is still on track to avoid any shortfall in the budget year ending June 30, and the county preserved its coveted AAA bond rating for a $165 million bond sale slated for this week. But he said he can’t guarantee county workers will escape a third straight year of unpaid furloughs. County Executive Ken Ulman is to unveil his budget proposals in April, and the County Council must adopt a new spending plan by June 1.

“Even though things have stopped getting worse, they aren’t getting much better,” Wacks said.

Unlike the past several years, the county won’t have to impose draconian midyear cost cutting, he said, though each job vacancy is being carefully weighed before anyone is hired. At the same time, this winter’s frequent but minor ice and snow have eaten through the annual $870,000 storm emergency fund, and Ulman plans to ask the council to approve most of the $1.7 million remaining in a general contingency fund to pay those bills through June 30, the end of the 2011 fiscal year. For example, Wacks said, the county had to spend $50,000 on overtime to put trucks on the street for a predicted ice storm that never materialized.

At the same time, Wacks said, the county has, for the 14th consecutive year, been awarded the highest bond rating by the three New York rating houses, which means county bonds carry the lowest risk of default and, therefore, can be sold for the lowest possible interest rates, saving taxpayers money.

But remains unsettled. No employee union contracts have been agreed upon, and a new white-collar unit of the American Federation of State, County and Municipal Employees has been formed to represent nearly 400 administrative and clerical workers in county government, joining police, firefighters, 911 operators, correctional officers and blue collar workers. The unit won certification Feb. 7 on a 159-90 vote.

In addition, state cuts to highway and school funding are still possible.

Asked by County Councilwoman Courtney Watson if he could say that furloughs will not occur in fiscal 2012, Wacks demurred. “Everything is still on the table,” he said. After the meeting, Watson said that ambivalence, while understandable, “isn’t a good sign.”

In a prepared statement on the bond rating, Ulman said, “As we have for the past four years, we will continue to make tough financial decisions, remain conservative in our spending and find efficiencies.” He said during last year’s re-election campaign that he has no interest in raising taxes, though he did not rule it out.

Earlier, Wacks showed the five council members how property tax revenue is flattening as residential property assessments continue to fall. Once reduced, he said, they stay static for at least three years.

“The message for us as a county is that we’ll see very low levels of growth for the next few years,” Wacks said. “We’re not going to see decreases,” as other counties might see, “but we’re not going to see increases,” either. For the first time in two years, income tax revenue will not decline, Wacks predicted, but that second-largest source of county income “will be at best flat.”

Watson, a fiscal conservative, said the county is “going to have to find a way to keep expenses level.” Wacks amended that by saying “largely level,” since some increased spending will likely be unavoidable.

As if to emphasize that point, Wacks’ presentation came after the council heard from groups promoting three efforts that could cost more money — improving public transportation, economic development and ending homelessness in one of the nation’s most prosperous places.

A new Office of Transportation is needed to raise the profile of public transit and promote a more regional system. The proposed office, now before the council, would be staffed by people hired to fill existing but vacant jobs in that field, the council was told.

In addition, the county’s Economic Development Authority gave the council a quick overview of an updated five-year plan to strengthen the area’s economy that identified the lack of regional mass transit and the potential for complacency as two of the most difficult problems.

“If we want to go from good to great, we have to fight the urge to sit back and say, ‘Aren’t we good already,'” said Richard W. Story, the retiring CEO of the authority. That means going forward with purchase of a transit center facility in Savage that will give the county more freedom to entertain transit bids from more companies, increasing competition.

The county’s Board to Promote Self-Sufficiency wants to promote more aggressive preventive measures to stop people from becoming homeless. There are more than 200 people living in county shelters and on the streets and in vehicles, according to Jane O’Leary, a board member.

“We can end homelessness,” she said, by identifying people in crisis and keeping them off the streets or by getting them into permanent housing as quickly as possible, as well as by treating people with chronic substance abuse or mental health problems.

“This is not a plan to go on the shelf. It’s a road map, and we’re already on the road,” O’Leary said, thanking the council for providing $43,600 from its budget last year to help, plus $4,400 more for Neighbor Ride, the volunteer-staffed transport system for lower-income seniors.

Casino nights approved

Howard’s General Assembly delegation approved one final local bill Wednesday morning. The measure, introduced by Del. Warren E. Miller, a Republican, would allow volunteer fire companies and veterans groups in the county to hold casino nights for fundraising purposes.

Miller originally wanted to allow just veterans groups the right to have up to five slot machines, but he was advised that would likely not pass, so he accepted a suggestion from Del. James Malone, a Democrat, to switch to casino nights, which are already allowed in Baltimore County.

The bill would now allow a maximum of one event per month involving card games and one roulette wheel event per year. Maximum cumulative prize money per night would be $5,000, and no single bet could be for more than $10 in tokens. Operators would be required to get a county permit and report their results to the county within 60 days.

The bill passed without opposition, though Del. Frank Turner, a Democrat who heads a House sub-committee on gambling, abstained. The entire General Assembly must now approve the bill for it to become law.

Copyright © 2011, The Baltimore Sun

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