Written By Patricia Rouzer
As Barack Obama’s nascent administration turns its full attention to the nation’s economic ills, several local officials voiced optimism about the financial soundness of Carroll’s municipalities and the county government. And they remain hopeful that, with a little help from their friends in Washington, 2009 will mark the launch of a less traumatized economy.
They noted that despite the current economic uncertainties, this fundamentally conservative county and the historically pay-as-you-go fiscal philosophy that pervades its officialdom will keep a variety of essential programs and services operating.
And while no one’s crystal ball yields a clear picture of when, whether and how federal dollars might trickle into the county, there seems to be no dearth of ideas among government officials about how potential federal infrastructure money might be spent.
In preparation for the possibility that the Obama administration and Congress will follow through with dollars for much-discussed funding for construction and capital improvements, representatives from Carroll’s eight incorporated municipalities met late last year with county officials.
They talked about what projects in their jurisdictions have already been engineered, a factor they feel might give them an advantage in competing for a piece of a possible federal stimulus package. Their hope is that if a large stimulus package is passed, it will lend priority for projects that are fully planned and ready for bids.
“We thought that by going together to submit a package we might all do better than if we were competing against each other for money,” said Thomas K. Ferguson, Mayor of Westminster. Ferguson noted that even Westminster, the largest of the county’s municipalities, currently receives little federal funding.
Sykesville Mayor Jonathan Herman said that his town gets nothing in the way of substantial federal aid. “We don’t really get anything because we’re too small a town,” he said. “The federal government gives to bigger cities; usually cities with populations of more than 35,000. As a town of about 4,500 we’re really not on the federal radar screen.”
But should money for projects in the Sykesville area become available, it would be welcome.
“We do have a pretty significant need for improvements at the Warfield Center (the former Springfield State Hospital Center),” Herman said. “I don’t really see that (federal funding for improvements) happening. We have a bridge that goes from Carroll into Howard County that needs improvement and Route 32 has been slated for improvement for a long time. These things are possible, but at this point they just don’t seem likely.”
Like Sykesville, Hampstead currently receives almost no federal money, according to Ken Decker, Hampstead town manager. “Speaking very roughly, about two-thirds of our revenues come from local property taxes, income taxes and the other sources you might expect. Most of the remaining third comes from county or state sources,” he said.
And while the federal government provides few dollars to help Hampstead meet the needs of town residents, it makes what Decker regards as substantial demands on the town: demands that actually cost the town money. Decker is leery of both the prospects for federal funds and strings that might be attached.
“While we receive very little federal money, we are governed by mountains of federal regulations,” Decker said. “We spend a great deal of money every year complying with unfunded mandates from both the federal and state levels. The biggest potential change in the Obama administration is the increase in federal regulations which place a direct burden on small governments like ours.”
“The problem we face is the lousy management at the state and federal level,” he added. “Every level of government above us can shrug and pass along the problem. We suspect the new administration will still have many things they want government to doÉ but no money to pay for them. The simplest solutionÉ just pass the responsibility to local governments.”
However, others in the county remain sanguine about the benefits that could come from successfully pursuing potential federal stimulus grants. For example, should federal funds become available, Westminster would likely seek grants for projects that because of the flagging economy have been put on hold, Mayor Ferguson said.
“One of Westminster’s major projects that is ready to go is street repaving,” Ferguson added. That project has been put on hold because in the current uncertain economy the city doesn’t want to face a half million dollars of debt service annually it would cost to go forward with the project.
“If we could get federal funding for street repaving, that would be very helpful. Local contractors are laying people off now, so it would pump some money into the local economy, provide some jobs and the city residents would benefit,” he said.
Westminster City Council President Roy L. Chiavacci noted that another project that might merit federal funding is a proposed water pipeline that would run from Big Pipe Creek to Westminster and Taneytown. That project would augment both municipalities’ water supply and provide a resource necessary for additional economic development.
“Water has been an issue in economic development. That additional water source could help us with industrial growth,” Chiavacci said. He added that if the infrastructure package becomes reality the city might also consider seeking funding for improvements to two aging Westminster landmarks: City Hall and the Armory, which houses the Westminster Family Fitness Center.
“Both of these facilities are very old and need to be more energy efficient,” he said. “With the increase in green standards, these kinds of projects – making municipal facilities more energy efficient – might be attractive to a stimulus plan.”
County Commissioner Dean L. Minnich noted that the county receives more than $20 million in federal funding in various forms. That includes approximately $12 million to the county’s Board of Education for special education, an amount that has been steadily declining as a percentage of the county’s education budget, he said. Students at Carroll Community College receive about $1 million in federal financial aid.
A variety of other county agencies and programs including housing, the sheriff’s office, the county detention center, the Carroll Area Transit Service, the Bureau on Aging, drug abuse treatment programs and a handful of other functions together receive a total of $7 million dollars. In addition, Carroll gets hundreds of thousands of dollars each year for bridge replacement and rehabilitation, Minnich said.
Other than (the Board of Education funding) there is little or no federal money that is straight operating revenue going to the county or allied agencies,” he added.
And although federal money for infrastructure construction might temporarily pump up the local economy and help improve county facilities, their benefits can be transitory, the commissioner warned. “The nature of grants is that they are always in danger of going away,” he said.
Minnich noted that even if the federal government puts into effect a major infrastructure funding program, there is no guarantee that Carroll government and its municipalities will get a piece of the hoped-for windfall.
“Most of these federal grants are passed through the state,” Minnich said. “If it goes to the states, which seems likely to me, (the question then becomes) how will Maryland choose to distribute the funding to counties?”
“As hard as it is to predict what the state will do, predicting what the federal government will do is many, many times more difficult. I won’t pretend that I can give you any predictions with confidence,” he added.
“That said, I think it is more likely that we will generally see stagnant or declining funding than we will see increasing funding. For any one area – who knows? It just depends on what is hot or not with the President and Congress.”
Lisa Wright, press secretary to Rep. Roscoe G. Bartlett (R-6th), who represents Carroll County in Congress, said that most federal funding is disbursed using a formula, and that it generally goes to the state which, in turn, distributes it to local governments.
And, she noted, that by late December Bartlett had received no earmark requests from any of the jurisdictions in his Western Maryland district.
Wright noted that Congressman Bartlett, a fiscal conservative she described as a “free market advocate,” voted against both the bailout of the big three U.S. automakers as well as the financial services industry rescue. She declined to predict his position on an idea that, at the time of this interview, was not yet a piece of legislation.
“His view is that government can hire people to do important jobs, but it cannot create wealth. Individual entrepreneurs create wealth,” she said. “He believes that the government should only do those things that cannot be done by the private sector.”
Despite the pervasive uncertainty about the economy and what, if anything, the federal government will do to assist them, local government officials continue to balance their budgets and look forward.
“Our budget must be balanced, but there is no doubt things are going to be fiscally very tight for a while,” said Mayor Ferguson. With property values declining and economic growth nationally at a standstill, government revenues seem destined to continue declining.
“We’ll have to seriously examine and prioritize our services and, if the economy continues to deteriorate, we may have to discontinue certain services,” he said, adding that “The budget rises in the areas over which we have little control. Fuel costs are down now and that will help us, but I don’t think those declines are going to continue indefinitely. Utility costs are rising and so are benefit costs, particularly health insurance.”
Coupling rising costs with declining revenues from real estate and sales taxes leaves no room in the budget for growth of services and programs in the foreseeable future, say elected officials.
Mayor Ferguson notes that Westminster’s budget has “always been fairly lean,” and the city staff and council may have to look at further ways to contain the city budget if the economic downturn threatens to continue into 2010. Nevertheless, he does not foresee layoffs of city employees, which he believes should always be a last resort.
“From a management perspective, layoffs should be the last thing any employer should consider,” the Mayor said. “They are demoralizing. And by laying off people you lose institutional memory and you lose productivity. We’ll look at everything else before we lay off people.”
Both Ferguson and Chiavacci are guardedly optimistic that the economy will begin to recover this year. Most of those interviewed for this article are buoyed by the anticipation of a new administration that promises ideas and action to fix what economically ails us.
“There is clearly a tremendous amount of fear about the economy and it is being fueled by the 24-7 news cycle. People who are afraid they won’t have a job aren’t going to go out and spend money” said, Ferguson, a retired banker who served as president of Carroll County Bank and Trust.
“I think we may see the bottom of the recession sometime in 2009, but I also think we’re in for tepid economic growth in the foreseeable future. Our current economic situation resulted from a rapid growth in the consumption fed by easy credit.
“It may take us two or three years to fully recover, but I think that when we do the economy will be much stronger in the long run.”