Budget reality hits Baltimore County
Olszewski’s campaign promises face challenges of $81 million gap
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. alisonk@baltsun.com twitter.com/aliknez