A looming budget crunch, which one County Council member said has "the potential to take our breath away," has made county officials keen on improving their relations with the business community.
The bleak budget picture has forced County Executive Charles I. Ecker (R) to consider borrowing money to balance this year's $286.4 million budget. Holding the line on spending next year will be even more difficult, Ecker and County Council members said.
"The numbers coming at us now are scary, scary numbers," said council newcomer Darrel Drown (R-District 2), a former budget director for the county school system. "It's got the potential to take our breath away."
Drown said the county doesn't have much choice but to become more aggressive in luring new businesses to the county and retaining existing ones. Unlike most residents, business owners tend to pay more in taxes than they receive in services, he said.
"It doesn't take a rocket scientist to know that businesses pay the bill," Drown said during a Chamber of Commerce luncheon last week.
Several council members used the luncheon to begin patching up relations between county government and the business community. A white paper issued by the chamber shortly after the November elections said relations between the two groups had suffered in the last four years "as a result of the recent controversy regarding growth and the publicity that resulted." County business people are growing concerned that they are losing their "competitive edge to other jurisdictions," according to the report.
Ecker told the chamber audience that he will make economic development a priority. He is considering making an exception to a hiring freeze in order to find someone to head the county's economic development office, a position that has been vacant for months.
He also pledged that "the county executive is going to be the top salesman."
County Council Chairman C. Vernon Gray (D-District 3) offered more tangible hope for businesses. He proposed that the county suspend its 18-month limit on building permits to help stimulate the struggling construction industry. He has said he will fight efforts to adopt a tax on hotel stays so the county doesn't lose its competitive advantage during a sluggish economy. And he backed Ecker's call for a revived economic development program, saying he was concerned that the subject only rated a "sub-chapter" of the county's recently adopted 1990 General Plan for guiding growth.
An aggressive economic development program is seen as one way to avoid a repeat of this year's tight budget situation.
County budget officials estimate that an $18 million deficit this year could grow once state officials decide how to balance their budget. So far, county officials have found savings equaling about $15 million. They hope other savings are possible in the education and library budgets.
Because county law requires that the county budget be balanced at the end of the fiscal year, June 30, Ecker said he might have to borrow money from other county funds to make up the difference to avoid layoffs. The county has several cash-rich funds to run its sewer and water system and pay for capital projects. Ecker is proposing -- if the approach is legal -- to borrow the money from those accounts on the last day of the fiscal year and return the money a day later so that the county doesn't violate its balanced-budget law.
Even if the proposal is legal, it would not help county officials build next year's budget.
By law, any money borrowed from the funds would have to be returned at the start of the new fiscal year. In addition, this year's $286.4 million budget was financed in part through a $25 million surplus left over from the preceding fiscal year. There probably will be no surplus this year, and it would take a 50-cent increase in the county's property tax rate of $2.45 per $100 assessed value to equal the $25 million that was brought forward this year from last year's budget.
Ecker said he won't propose an increase that large but is struggling to find ways to match this year's level of spending. In addition to the looming deficit, county officials expect employee health benefits to increase by as much as 35 percent next year and fuel oil costs to go up because of turmoil in the Persian Gulf.
The only hopeful sign, county officials said, is that some development-related revenue is showing signs of improving. However, it is still too early to see whether the trend will hold, they added.
County Council member Shane Pendergrass (D-District 1) said she hopes county officials don't lose sight of government's basic priorities as they court businesses and worry about budget problems.
"My concern is that we continue to make the connection between economic development and the need for good schools and adequate social welfare programs. You can't have one without the other. The two go hand-in-hand," she said.