A suit was filed in Prince George's County Circuit Court yesterday seeking to invalidate the TRIM county charter amendment approved by the voters last fall that limits property tax collections.
The TRIM amendment, restricting county tax collections to the $140 million collected in the 1978-79 fiscal year, resulted in a pared-down county budget this year that forced many cutbacks, angered school officials and led to conflicts with county employes over wages. More drastic budget cuts are predicted by some county officials this year.
The suit, filed by two men who own county bonds, focuses on the amendment's effect on bonds, which the county sells to finance such projects as school and road construction. It argues that TRIM creates a conflict within the charter that weakens the county's financial backing for the bonds it sells and places previously issued bonds in jeopardy.
While the TRIM amendment restricts the county's ability to tax its residents by placing a ceiling on property tax collections, the charter provides that bonds are sold with the backing of the "unlimited taxing authority" of the county.
Calvert Steuart, attorney for the two bond owners, said yesterday that by creating this conflict, TRIM "changes the relationship between the bondholders and the county" and is thus unconstitutional.
Steuart said the suit also challenges the validity of the petitions used to put TRIM on the ballot last November, because they allegedly lacked all the information required by state law.
"The reason for the suit is that there are bondholders who have had the security of their bonds lessened," Steuart said.
Steuart and one of the bond owners filing the suit, Stanley S. Pickett, filed a similar suit just before last November's election in an attempt to get TRIM taken off the ballot. The effort failed when a judge ruled that they had not shown how they would be hurt by having the referendum appear on the ballot because the TRIM proposal might be defeated in the forthcoming referendum.
County officials said yesterday they believe the new suit has a much better chance of overturning TRIM.
For one thing, the county's bond rating recently was reduced from AA to AA minus by Standard and Poor's rating service because of the "questionable" effect of TRIM on the county's ability to back its bonds.
The bond rating is used by investors interested in purchasing bonds and determines the interest rate the county must pay for its bonds.
County Attorney Robert Ostrom re
County Attorney Robert Ostrom recently wrote another rating agency to say that if TRIM were applied to past bond sales, "it would be an impairment of contract." The county has interpreted TRIM to apply to future bond sales only, Ostrom said.
William Goodman, one of the co-authors of TRIM, said yerterday that "we're prepared for a drive to overturn TRIM. If there is an attempt at repeal, though, we will put in a petition to make it even tighter" by pushing for a return to [fiscal] 1977 or 1978 tax collection levels.
"Secretly 99 percent of the politicians would have liked to see TRIM fail in the general election, but they didn't have the courage to say so publicly. They would like to see it overturned now by the courts," he said.