Baltimore County Executive Jim Smith this morning proposed a $1.7 billion budget that includes a modest spending increase ? but no new taxes ? and reflects what he called the county and state?s “economic malaise.”
The 2009 budget comes within $977 of the 4.56 percent spending increase cap recommended by a committee that expressed concern with decreasing county revenues amid the sour housing market. In his sixth annual budget message, the Democrat said he did not include anything that isn?t essential to basic government.
“The people of Baltimore County understand the importance of living within their means,” Smith said. “We all must do so. Otherwise we go into debt.”
Including one-time expenses, Smith?s budget totals $1.72 billion, or about 3.6 percent more than this year?s budget.
More than half of Smith?s operating and $230 million capital budget is also dedicated to school construction, including funds needed to complete a new elementary school in the Perry Hall area and $12 million for additions to schools in the Towson area.
Smith did not include cost of living adjustments for county employees ? which would cost $14 million for each 1 percent increase ? for the first time since 2001. An arbitrator awarded county police a new $4 million pay step, which Smith was legally bound to include and funded in a contingency account to avoid exceeding spending limits.
Smith said he is prepared to identify equivalent cuts if the council does not approve the award in its final budget. The council can cut the budget, but can?t add to it, and won?t likely exceed the spending cap, said council chair Kevin Kamenetz.
“It?s a tremendous dilemma,” the Pikesville Democrat said. “We have to make cuts or revisit the arbitrator?s decision. Then all hell breaks lose.”
Property tax rates have not been raised in Baltimore County in 19 years ? and were twice reduced ? and its income tax rate has been the same for 15 years. Smith?s budget also maintains a 4 percent cap on property assessment increases expected to save homeowners $171 million next year, budget officials said.
County finance director Keith Dorsey said the county is already seeing slowing property tax and decreasing recordation and transfer tax revenues.
The council will hold a series of hearings before adopting a final budget May 22.
