Most of Howard County?s $38 million budget surplus will go to reduce the nearly $480 million debt that covers current and future retiree benefits.
But the newly elected county executive will need to determine how to fund this looming obligation in the future.
“The notion of a surplus is moot,” County Executive James Robey said in a statement, in which he requested that $30 million be set aside this year.
The county must comply with new national accounting standards being enforced in July 2007 that require local jurisdictions to show they can pay for current and future retiree benefits.
Based on the current employee benefit program, Howard must set aside about $53 million each year to pay down this debt and fund the ongoing program, said Sharon Greisz, the county?s director of finance.
Robey created a task force to examine the benefit program and the new reporting requirements, and their report can guide the new administration, she said.
However, “it depends on how [the new administration] decides to do it,” Greisz said, adding the money could come from a reduction in benefits or other services.
“That?s why [Robey] didn?t want to make a decision and lock it in.”
Republican county executive candidate and Council Member Chris Merdon, District 1, said he would wait to see the committee?s recommendations before determining how he would fund the benefits.
“I cannot make a decision in a vacuum,” he said. “I need to see the entire budget picture before doing any spending.”
Democratic county executive candidate and Council Member Ken Ulman, District 4, said he still has plans to add police department staff, consider targeted tax relief for certain residents and use cash to cover school construction ? in addition to finding money to satisfy the accounting mandate.
“It?s going to be a real challenge,” he said.
Independent candidate Stephen Wallis said it would be a priority to put a plan in place to ensure the liability is covered, so the county can keep its AAA bond rating, which allows it to borrow money at a low interest rate.
