Montgomery County Executive James P. Gleason yesterday recommended a 26-cent reduction in the property tax rate because of what he called the healthiest economy in the county in eight years.
Few homeowners actually would have lower tax bills next year under the proposal, which must be approved by the County Council. It would, however, help offset escalating taxes caused over the last 10 years by steep and rapid increases in assessments.
The owner of a house worth $63,000 last year, and paying $1,175 in property taxes, would have been assessed this year at $70,000 and would pay about $1.288 without the decrease, according to county assessment officials. With the decrease in the rate, the same homeowner would pay about $1,200 next year.
Even with the property tax reduction, there will be sufficient money in the county treasury to grant its 5,000 employes a 6.8 percent cost-of-living increase, which Gleason happily recommended to the council.
Gleason, Montgomery's first and only county executive, said it was "the first healthy economy we have enjoyed" during his eight years in office. "This is the first time we've had the option of balancing the budget without putting a freese on employe hiring and without program cuts," said budget director John W. Short.
Gleason also approved the county school board's requested five percent raise for Montgomery County's 11,500 public school employes and increased the funds for the school system.
Asked why he did not cut more from the school budget, Gleason shrugged and said, "I guess I'm in a good mood."
Asked why he used the surplus for lowering the tax rate, Gleason replied, "What could I do with it? Why shouldn't I give it back to the people if it's theirs?
Montgomery County, with a $14 million surplus, is not the only local government projecting extra money for the coming budget year. According to the U.S. Commerce Department, operating budgets of state and local governments ran surpluses last year of $13.3 billion only two years after having deficits of $6.2 billion.
The year "was just a great year for us," said Albert Gault, in explaining why Montgomery County had a surplus for the coming budget year. "We came out of a recession much quicker than we expected. We thought we would have $60 to $70 million in new (revenue-producing) construction. instead we had in excess of $100 million in new construction."
In addition, Gault said, transfer taxes - the tax paid on each property transaction - produced $2.6 million more than the county expected. Interest rates went up over 50 percent, he added, causing the county's investments to grow by $2.2 million.
The last few years have seen noisy confrontations in Montgomery County as well as other area jurisdictions over tight budgets and deficits rather than surplus.
Gleason's proposed fiscal 1979 budget calls for spending $564.4 million, 8.7 percent more than the current spending level. The bulk of the increase would go for the cost-of-living raise.
He said he would not cut any existing expenditures from the proposal because "I have some programs that must move ahead." He did provide money for several new or expanded projects.
The additional expenses in the new budget that Gleason has proposed include:
An expansion of the county's Ride-on bus service, a shuttle service - costing 25 cents a ride - within the county.
An increase from 220 to 350 in the number of police patrol cars that can be taken home by patrol officers as a deterrent to crime in the communities where they live.
A central crisis center and shelter for victimes of child abuse, battered spouses and rape victims. It will be housed at a remodeled Bethesda Chevy Chase Rescue Squad building at a cost of $300,000.
An increased rent relief program for the elderly and disabled, which would cost an additional $500,000.
Gleason warned that if Acting Gov. Blair Lee's proposal to cut the rate of residential assessments from 50 percent of market value to 45 percent is approved by the Maryland legislature, Montgomery County would lose about $14 million in property tax revenues.
That would mean the county could reduce the tax rate only by one penny. However, since assessments would be cut by Lee's proposal, the homeowner's property tax bill would remain about the same amount as last year, budget official said.
Gleason did say that next year's budget, for fiscal 1980, would need about a 20-cent property tax rate increase if it contained all the programs now in the budget.
Gleason said, with a smile, that the next elected county executive - a post that Gleason announced a month ago he would retire from - could consider various ways to cut program and avoid the tax rate increase predicted.
Gleason's proposed budget now goes to the County Council for review must be completed by May 15. May 15. The counch usually raises The council usually raises Gleason's budget by a few million dollars.
In the meantime the council will hold public hearings for citizens to comment on the budget. Public hearings will be held on March 27, 29, 30 and April 5, 6, 8 at different location.