Budget re­al­ity hits Bal­ti­more County

Ol­szewski’s cam­paign prom­ises face chal­lenges of $81 mil­lion gap

Baltimore Sun Sunday - - FRONT PAGE - By Ali­son Kneze­vich

Johnny Ol­szewski Jr. de­liv­ered an up­beat mes­sage on the cam­paign trail, promis­ing a fresh ap­proach to gov­ern­ing as Bal­ti­more County ex­ec­u­tive. Now in of­fice, he is trav­el­ing around the county telling a more sober­ing story.

Con­fronted with an $81 mil­lion budget gap, Ol­szewski is wrap­ping up a se­ries of town hall meet­ings where he has told res­i­dents of chal­leng­ing times ahead. Af­ter mak­ing bold prom­ises about county schools — 20 per­cent raises for teach­ers, three new high schools, and pre-kinder­garten for all fam­i­lies — the county ex­ec­u­tive says he’s try­ing to fig­ure out how to fill the hole be­fore he de­liv­ers his first budget plan this spring.

“I will con­cede that what was a hill is now a very steep hill,” the Demo­crat, who took of­fice in De­cem­ber, said in an in­ter­view. “But I’m no less com­mit­ted to try­ing to climb it.”

Some be­lieve that to pro­vide the schools and ser­vices the county needs, he will have to raise taxes — a move no Bal­ti­more

County ex­ec­u­tive has made in decades. The county’s prop­erty tax rate has re­mained un­touched since 1988, its in­come tax since 1992.

“One of his planks in the plat­form was ed­u­ca­tion — fully fund­ing ed­u­ca­tion,” said Ran­dall­stown res­i­dent Aaron Ply­mouth, a fa­ther of two and long­time com­mu­nity leader who moved from Bal­ti­more to the county in 1985 for its schools. “You can’t do that with­out money.”

Asked whether he is con­sid­er­ing tax hikes, Ol­szewski says that “ev­ery­thing’s on the ta­ble.”

But he calls taxes “the last thing that we should turn to,” say­ing he first wants to make sure county dol­lars are be­ing spent wisely.

“We have to do that be­fore I would feel com­fort­able turn­ing to the coun­cil and the pub­lic to say we need ad­di­tional rev­enues,” said Ol­szewski, a for­mer county teacher and state leg­is­la­tor.

No mat­ter the choices Ol­szewski ends up mak­ing, County Coun­cil Chair­man Tom Quirk says the county needs to have an over­due con­ver­sa­tion, in­clud­ing about whether it’s time to raise taxes.

“We need to re­ally de­cide — what do we want as a county, and what are we will­ing to pay for it?” said Quirk, an Oella Demo­crat.

Ol­szewski is draw­ing crit­i­cism from some Repub­li­cans and oth­ers for mak­ing so many cam­paign prom­ises; he won elec­tion in Novem­ber with a com­mand­ing 57 per­cent of the vote over Repub­li­can Al Red­mer, the state in­surance com­mis­sioner.

“We knew all along what he was say­ing wasn’t go­ing to mesh with the way he was ac­tu­ally go­ing to gov­ern,” said Al Men­del­sohn, for­mer chair­man of the county Repub­li­can Party. “The idea that he should be sur­prised by the state of the budget is re­ally al­most far­ci­cal.”

The county’s cur­rent prop­erty tax stands at $1.10 per $100 of as­sessed value. It’s half the rate of Bal­ti­more’s, but higher than the rates in Anne Arun­del, Har­ford, Howard and Car­roll coun­ties.

Bal­ti­more County’s in­come tax rate is 2.83 per­cent, which is sec­ond-low­est of those ju­ris­dic­tions. Howard County and Bal­ti­more City res­i­dents pay the high­est rate in the area, 3.2 per­cent.

Ol­szewski must sub­mit his budget pro­posal for the com­ing year to the County Coun­cil by April 16. This year’s county budget is $3.3 bil­lion.

The $81 mil­lion hole Ol­szewski must fill does not in­clude the teacher pay raises, the new high schools for Du­laney, Lans­downe and Tow­son or the pre-kinder­garten pro­grams he promised as a can­di­date. The ad­min­is­tra­tion has not put for­ward the es­ti­mated first-year costs for im­ple­ment­ing those pro­pos­als.

Ac­cord­ing to the county teach­ers union, pro­vid­ing a 2 per­cent raise for teach­ers and other school sys­tem em­ploy­ees would by it­self cost about $18 mil­lion a year.

This isn’t the first time Bal­ti­more County has faced a short­fall. But Ol­szewski has been pub­li­ciz­ing the sit­u­a­tion. On his first day in of­fice, he set up a blue rib­bon com­mis­sion to scru­ti­nize the county’s fi­nan­cial out­look. Chaired by for­mer county ex­ec­u­tive Don Mohler, mem­bers have been meet­ing weekly in the Tow­son court­house to dis­sect the budget. Their fi­nal rec­om­men­da­tions are due in May.

At each of Ol­szewski’s town hall fo­rums, which he has hosted with County Coun­cil mem­bers, hun­dreds of county res­i­dents have turned out. They’ve asked him to fix over­crowded schools, pro­vide more recre­ational op­por­tu­ni­ties and lower crime.

Last month, Ol­szewski took the un­usual step of tes­ti­fy­ing be­fore the county school board to warn of tough fi­nan­cial times. In­terim Su­per­in­ten­dent Ver­letta White, at the di­rec­tion of the school board, slashed her orig­i­nal pro­posal for the school sys­tem’s op­er­at­ing budget for next year, set­ting off protests by county teach­ers.

Ol­szewski also made the rounds in An­napo­lis, telling state law­mak­ers the county needs to get its “fis­cal house in or­der” and ask­ing them to more than dou­ble the state’s school con­struc­tion con­tri­bu­tion to $100 mil­lion an­nu­ally the next five years.

“From our stand­point, we’re glad that we’ve got a trans­par­ent view of what’s hap­pen­ing,” said state Del. Pat Young, a Demo­crat who chairs the county’s House del­e­ga­tion.

Ol­szewski ad­min­is­tra­tion of­fi­cials point to sev­eral fac­tors as driv­ing the county’s cur­rent short­fall. In re­cent years, the late County Ex­ec­u­tive Kevin Kamenetz slashed an­nual con­tri­bu­tions to a fund set aside for re­tiree health care costs — con­tribut­ing just $5 mil­lion last year, as com­pared to more than $100 mil­lion in 2015. The county then drew down on that fund to pay for cur­rent re­tiree health care costs.

More than half the pro­jected $81 mil­lion deficit is a nearly $45 mil­lion pay­ment the Ol­szewski ad­min­is­tra­tion says is needed to be­gin restor­ing that fund to proper lev­els. But oth­ers ques­tion whether such a large con­tri­bu­tion would be nec­es­sary in the com­ing year. Coun­cil­man Wade Kach, a Cock­eysville Repub­li­can, calls that pro­posed pay­ment an “ar­bi­trary” num­ber.

Ad­min­is­tra­tion of­fi­cials also point to county debt costs that rose as Kamenetz ac­cel­er­ated school ren­o­va­tions and con­struc­tion. This fis­cal year, the county spent more than $127 mil­lion on debt ser­vice, up 24 per­cent from 2015.

The county’s Spend­ing Af­ford­abil­ity Com­mit­tee, which rec­om­mends how much the county can af­ford to spend, has pointed to other pres­sures: steadily ris­ing county con­tri­bu­tions to the re­tire­ment sys­tem and cost-of-liv­ing raises for county em­ploy­ees.

And a re­port by Pub­lic Re­sources Ad­vi­sory Group, a New York firm that eval­u­ates county bor­row­ing pat­terns, warned last year that Bal­ti­more County could not con­tinue its cur­rent path with­out risk­ing a down­grade of its AAA credit rat­ing.

Kach and other Repub­li­cans blame spend­ing on pro­grams such as the county school sys­tem’s $147 mil­lion ini­tia­tive to give ev­ery stu­dent a lap­top com­puter. They also crit­i­cize the $43 mil­lion in pub­lic fi­nanc­ing granted to the devel­op­ers of Tow­son Row in 2017. That pack­age, pro­posed by the Kamenetz ad­min­is­tra­tion, passed the coun­cil 4-3 along party lines, with Democrats sup­port­ing it.

“I think there are op­por­tu­ni­ties to bring ef­fi­cien­cies ... to govern­ment and take a look at pro­grams that are ex­traor­di­nar­ily ex­pen­sive,” said Coun­cil­man Todd Cran­dell, a Dundalk Repub­li­can.

The school sys­tem’s White has al­ready put forth a plan to scale back the com­puter ini­tia­tive, propos­ing to pur­chase Chrome­books in­stead of a more ex­pen­sive de­vice for ele­men­tary school grades.

Yara Cheikh, a county ed­u­ca­tion ac­tivist, ar­gues the lap­top pro­gram was funded by cuts from across the school sys­tem.

“Any sav­ings from [the lap­tops] needs to be re­al­lo­cated back into the school budget,” she said. “The needs of our school sys­tem far out­weigh those sav­ings … We need to find sources of rev­enue to do that.”

She sup­ports leg­is­la­tion be­fore the Gen­eral Assem­bly that would au­tho­rize the county to im­pose im­pact fees on devel­op­ers to fund school con­struc­tion and im­prove­ments to in­fra­struc­ture.

Quirk says im­prov­ing the county’s fi­nan­cial sit­u­a­tion will take more than cuts to the lap­top pro­gram.

“The op­er­at­ing gap that we have couldn’t be cov­ered by that,” Quirk said. “I think all op­tions should be on the ta­ble, but there’s not some mag­i­cal fix out there. [There are] go­ing be hard de­ci­sions, un­for­tu­nately.”

Ol­szewski has told his de­part­ment heads to draw up spend­ing plans that as­sume no in­creases. Ob­servers say he is mak­ing a smart move by en­gag­ing the pub­lic be­fore un­veil­ing his first budget.

“The county ex­ec­u­tive I think has done a very good job at pre­sent­ing the budget to com­mu­nity mem­bers,” said Coun­cil­man Izzy Pa­toka, a Pikesville Demo­crat. “It’s re­ally hard to have buy-in from the com­mu­nity if you’re us­ing budget speak.”

By tak­ing the pulse of res­i­dents at the town hall meet­ings, Ol­szewski can as­cer­tain the pub­lic’s pri­or­i­ties — in­for­ma­tion he can use when mak­ing de­ci­sions on spend­ing, said Mileah Kromer, direc­tor of Goucher Col­lege’s Sarah T. Hughes Field Pol­i­tics Cen­ter.

Ol­szewski is al­ready seen as a pos­si­ble con­tender in the 2022 gu­ber­na­to­rial race, so if he does raise taxes, it’s likely to come early in his four-year term as ex­ec­u­tive, said John Dedie, pro­fes­sor and co­or­di­na­tor of the po­lit­i­cal science pro­gram at the Com­mu­nity Col­lege of Bal­ti­more County.

“You do a tax in­crease closer to an elec­tion year, cit­i­zens re­mem­ber those things and you get a lot of blow­back,” Dedie said.

Bal­ti­more Sun re­porters Liz Bowie and Pamela Wood con­trib­uted to this ar­ti­cle. al­[email protected]­sun.com twit­ter.com/aliknez

LLOYD FOX/BAL­TI­MORE SUN PHO­TOS

Azziz Grooms has his head­gear se­cured as he gets ready for his wrestling match at the City Cham­pi­onships.

Ol­szewski

BAR­BARA HAD­DOCK TAYLOR/BAL­TI­MORE SUN

Bal­ti­more County Ex­ec­u­tive Johnny Ol­szewski Jr. has held a se­ries of town hall meet­ings to dis­cuss the county’s budget sit­u­a­tion.

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