Anne Arundel County Revenue Restriction 2012 Time for a Change

Time for a change Every parent, student, public employee, businessman and citizen should be frightened by what the current revenue restriction is doing to Anne Arundel County. Attempts by elected officials to hide the growing problem by raiding reserves, digging into employees’ pockets and stealing money from education cannot continue indefinitely. Reserves eventually run dry. Students no longer succeed. Emergency calls are answered too late to help. Employees are eventually impoverished. The revenue restriction in its current form is a formula for failure. The last years have been evidence enough. It is time to change it. We can retain some restriction on public spending without suffering from the chokehold on services locked in by the current charter provision.

What is the Revenue Restriction? The result of voter referendum in 1992 Efforts by well-to-do and well-intended waterfront land owners whose tax assessments were skyrocketing. 75% voters pulled the “Yes” lever. The popular support forever changed the attitudes of those elected to office who took the message from voters, “Don’t tell me about services, just don’t tax me!” Impacted budgets since fiscal year 1994

The Restriction States Sec Reproduction of budget; effective date; tax levy; appropriations. (d) Property Tax. From and after July 1, 1993 revenues derived from taxes on properties existing on the property tax rolls at the commencement of the County fiscal year shall not increase, compared with the previous year, more than the Consumer Price Index percentage of change, or by 4.5 percent, whichever is the lesser. The Consumer Price Index shall be determined by the preceding January computation by the U.S. Department of Labor.

Impact Only allows keeping pace with inflation or less Chokes revenue collections in years of very low inflation. Such as  0.6% in FY99  0.96% in FY10 18-year average; 2.56% Most recent 3-year average; 1.93% Aggregate collections; $7.264 Billion

Impact Potential for budget catastrophe in years of very high inflation. From 1973 to 1982, inflation was above the 4.5% restriction every year Low same time period of 5.75% High same time period of 13.58% Ten year average, 8.76% (nearly double what the restriction allows) If the current restriction was in place during those years the County, its schools, emergency and other public services would still be recovering.

Impact (cont’d) Inflation hit 4.85% in FY09. The restriction capped revenue at 4.5%. Did not even keep up with inflation. Good fortune has allowed inflation to exceed the restriction only once since FY94. Fortune is known to be fickle.

The Modification Sec Reproduction of budget; effective date; tax levy; appropriations. (d) Property Tax. From and after July 1, revenues derived from taxes on properties existing on the property tax rolls at the commencement of the County fiscal year shall not increase, compared with the previous year, more than the Consumer Price Index percentage of change, or by 4.5 percent, whichever is the lesser greater. The Consumer Price Index shall be determined by the preceding January computation by the U.S. Department of Labor.

If in place since 1994… … and if maximum authority was used…. 4.5% in FY99 (instead of 0.60%) 4.5% in FY10 (instead of 0.96%) 4.85% in FY09 (instead of 4.5%) 18 year average 4.52% (instead of 2.56%) 3 year average 4.5% (instead of 1.93%) Aggregate collections $7.593 Billion (instead of $7.264) Up to $328.6 Million in additional county resources

$200,000$45 $250,000$56 $300,000$67 $350,000$78 $400,000$89 $450,000$100 Potential Cost to Taxpayers IF maximum authority was applied

Potential Return to Taxpayers, if Stop the consistent increase in class sizes. Recruit and retain highly qualified teachers, police officers, and firefighters and other public servants. Fix the buildings that are making our children sick. Bring the emergency forces up to full force and get response times back down. Fix the fire trucks.

Potential Return to Taxpayers Fix the police cars. Maintain the roads Prepare for BRAC Put the libraries back on full hours. Repair and protect bond rating

Petitions Voter referendum will be required 20,296 signatures need to be certified 10,148 (plus 1,500) by July 12 10,148 (plus 1,500) by August 12 Every parent, student, public employee, businessman and citizen should be frightened by what the current revenue restriction is doing to the county

Action Plan Multi-level plan underway Polling Seeking Campaign Chair and Treasurers Media Milestones

First Milestones 5500 signatures to the TAAAC Office by: Mar 15 th Apr 15 th May 15 th June 15 th