If the Prince George’s County Council approves a $2.64 billion fiscal 2008 budget as expected today, the county will immediately face a $17 million hole.
As part of his fiscal 2008 budget, County Executive Jack Johnson proposed increasing the county’s tax on phone service from 8 percent to 11 percent, which would generate $17.1 million. All of the money would go to the Board of Education.
Although County Council Vice Chair David Harrington expects the council to pass the $2.64 billion budget with some minor modifications, the council hasn’t OK’d the tax increase and may never approve it.
“Obviously, the [telecommunications] industry is very concerned about what a tax increase would mean to their industry,” Harrington said. If the council doesn’t approve the phone service tax increase, Harrington said, there are “many ways to capture the $17 million.”
For example, Harrington said the money could come in a supplemental budget, from funds leftover from projected expenditures and from the council’s ability to raise estimated revenue in a proposed operating budget by up to 1 percent.
“By approving the budget,” Harrington said, “the council is not suggesting there will be a shortfall.”
On Monday, Harrington said, a council committee met for the first time on the phone service tax legislation. The full body would have to approve the tax increase before it went into effect. But Harrington said the committee took no action.
“What the committee was saying was we want to consider some of the arguments,” Harringtonsaid.
“The county executive proposed a small increase in the telecommunications tax because that fund is 100 percent dedicated to education,” Johnson’s chief of staff Michael Herman said. “The county executive feels very strongly that if we want to build a first-class education system and build on our recent success in the school system, we have to fully fund education.”
Harrington said the council committee would revisit the legislation in June.
