After years of delay and weeks of negotiation with the Internal Revenue Service and county officials, out-going Prince George's County Executive Winfield Kelly Jr. has finally arranged a way to give the county $35,000 of his own salary.
While a council member and executive candidate in 1974, Kelly voted is raise, the executive's yearly pay from $35,000 to $42,000, but promised that he would refund the extra $7,000 to the county each year while he was executive.
Next month, the county may finally get the money. "It's been a long, hard battle," said Kelly aide John Lally. "Winnie had to jump through hoops to throw his own money down the hole.
"But," said Lally, who is finding a new job after Kelly's recent election defeat by Lawrence Hogan, "that's the kind of year it has been."
Kelly's problems with giving his salary raise to the county began when the IRS informed him that he would have to pay taxes on money he returned. To avoid having to pay to give money away, Kelly deposited the extra funds in an International City Management Association (ICMA) deferred compensation account, normally used for retirement savings by employes.
It was not until recently, Lally said, that Kelly found out that the county would be unable to use the funds he deposited in the account - even though the county has legal jurisdiction over them - and that Kelly himself could not withdraw them before his retirement without paying a fine.
Under an agreement worked out last Friday between Kelly and county finance director William Brown, Kelly will be able to withdraw the funds from the account without penalty, then donate them to the county as a tax-deductible gift.
According to Hilton Wade, the county's pension manager, the official transfer of the salary - which appreciated to slightly over $37,000 - should take place next month.
"We're still not sure about the taxes," Wade warned, however. "The IRS hasn't given us word on that one way or the other. Kelly may still have to pay something for this."