Johnson Offers Secret Budget Warning

By Rosalind S. Helderman
Washington Post Staff Writer
Thursday, November 13, 2008

Prince George's County Executive Jack B. Johnson met behind closed doors yesterday with state lawmakers and members of the County Council to inform them the county will face a projected $70 million budget shortfall next year.

According to several officials who attended the meeting, Johnson (D) suggested he might soon ask delegates and senators to introduce legislation that would give him and the council broader taxing authority to plug the hole.

Prince George's has some of the nation's strictest barriers to tax increases, including a property tax cap and a requirement in the county charter that tax increases be approved by voters.

The county faces its worst budget outlook in more than 20 years. All county employees are being forced to take two weeks of unpaid leave this year to save money, even though the council had worked to boost revenue, agreeing to a request by Johnson to raise the income and recordation taxes.

Council members said the two taxes were not subject to the county charter's requirement that tax increases by approved by voters because the General Assembly gave localities permission to impose them and provided guidance on how to set rates.

Johnson and his aides told delegates and senators yesterday that he might need the similar ability to raise other taxes, noting that the continuing decline of the housing market means the county's budget problems will probably grow more grim. By July 1, 2010, he said, the county could be $70 million in the hole.

Without revenue alternatives, Johnson and aides said, deep budget cuts would be necessary, including possibly another round of furloughs for employees or layoffs.

Participants said Johnson asked for suggestions on how to boost revenue and implored lawmakers not to cut state aid to the county and worsen the budget.

Those who spoke about the meeting did so on the condition of anonymity because the gathering was not announced ahead of time and Johnson's aides asked that their comments be kept confidential. A reporter was barred from the briefing.

But some of those who attended said state lawmakers expressed skepticism about giving Johnson and the council a freer hand to raise taxes.

They noted that the County Council had rejected Johnson's assertion in 2007 that state law allowed for an increase in the tax on telephone bills. Johnson had asked for an increase from 8 to 11 percent, using much the same logic applied to the income and recordation taxes a year later. But council members voted instead to send the proposed increase to a referendum, and last week, 71 percent of county voters rejected the idea.

Some lawmakers also questioned a decision by the county school board to spend $36 million on new offices, given the county's budget woes.

James Keary, a spokesman for Johnson, would not comment on the new budget figures or Johnson's suggestion that he was interested in wider taxing authority.

"Anything talked about today was in draft form," Keary said. "There is no proposal on the table."

He said the meeting was private so top leaders could "speak freely."

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