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February  3,  2011

Clark rules out possibility
of a property tax increase

County Executive Paul Clark declared unequivocally that the budget for the coming fiscal year will not include an increase in the property tax rate while indicating that fees for sanitary sewer service are likely to go up again.

With the state and national economies improving more slowly than during past recoveries from recession, this is "not a time for [residents] to be paying more for [county] services," he told Delaforum in an interview. Instead, he said, "we're going to pull the belt in as tight as we can."

The biggest imponderable in that regard is the outcome of labor negotiations now getting underway. With about 75% of the budget going to pay salaries and benefits and the majority of country employees represented by unions, hard bargaining is a foregone conclusion.

Other than to say that "everything will be on the table," Clark declined to be specific about what the administration will propose or to comment about what he would expect the result to be. He did, however, indicate that he looks for continuation of the 5% rollback in county pay scales or its equivalent in cost savings from concessions in work rules that has been in effect for two years.

Asked if layoffs might be in the offing, he replied, "My hope is that we can do it with work rules and attrition."

On the other hand, he added that a parallel to reducing cost is to be found in productivity. During the current run of winter weather, the county has not shut down, he said. "Every hour that we don't operate is a loss of $25,000 in productivity," he explained. As it was, "better than 90% of our people were able to safely get here" despite weather-related travel conditions.

According to the most recently available financial report, county government was running an annualized $3.4 million ahead of budget through December, the midpoint in the fiscal year. Of that, $3.1 million was the result of projected lower expenditures. Nevertheless, County Council's finance committee has been told that available budget reserves are expected to run out by July, 2013, and, if current trends and budgetary policies continue, the cumulative budget shortfall will be $33.4 million through fiscal 2015.

The impact of the so-called 'Great Recession' on county government has been a five-year revenue loss of $185.5 million, according to Ed Milowicki, acting chief financial officer. That exceeds the current $165.7 million operating budget. The bulk of the loss has been a precipitous drop in receipts from the real estate transfer tax. The current projection is for the tax to yield $15.7 million this year, compared to $40 million in fiscal 2006.

In the interview with Delaforum, Clark ruled out as impractical an appeal to the General Assembly for support. "Nobody is going to help us; we have to help ourselves," he said. "I'll be real happy if they leave us along."

That comment referred to any shift of state-supported functions to county government as a way to deal with the state's fiscal situation. It is not considered likely that the Assembly would grant county government the authority to tap new revenue sources. Lacking home rule, county government requires state approval in that regard.

Clark also said it would be both politically and economically unfeasible to look to a reassessment of property values -- one of the major revenue-enhancing moves suggested in the recent report from the committee he appointed to chart a path for the transition to his administration. Property assessments which provide the basis on which real estate tax is levied are pegged to obviously out-of-date 1983 market value.

Asked where additional belt-tightening might produce savings that would alleviate the situation, Clark gave a few examples along the lines of the proverbial watching nickels to conserve dollars. For instance, he said, "Do we need a spare tire in every [county-owned] car?" Spare tires are seldom needed and, when they are, they could be obtained from a pool considerably smaller than having one tire available for each vehicle at a cost of about $100 apiece.

On a larger scale, he mentioned the possibility of privatizing some county services and functions. Turning the operation of Rockwood Mansion and Carousel Parks over to private contractors is under consideration.

Clark said the basic premise on which his administration is constructing its first budget -- due to be presented to Council in March -- is to maintain core services at acceptable levels while deciding where cutbacks can be made. He said core services include public safety, libraries and parks.

He said he remains opposed to imposing fees to use libraries and parks, as has been suggested in some quarters. Instead, he said, the county will seek voluntary support for those facilities from 'Friends of ...' organizations and through voluntary contributions from the general public to the nonprofit County Pride, an organization established to channel donations to county activities.

Clark said he strongly supports economic development for the county. He denied that incentives to attract businesses -- particularly major corporations with large-scale projects planned -- are drains on the county treasury. "We expect to break even or come out ahead" on tax and fee revenue they generate, he said. Reopening the Delaware City refinery, for instance, has already produced a significant transfer tax payment and the jobs it provides will have a 'ripple effect' throughout the county economy.

Although it is the largest local government in the state, Clark said he continues to wonder at how little the average resident knows about it or, in many cases, is unaware it exists. He said his administration intends to mount a major effort to "let people know what we do and how we do it."

It is planning to hold three or four public meetings at convenient locations in the spring in the hope of attracting audiences that are representative of the general population. They will be followed by stepped up efforts to use various media "to get the message out," he said.

"We're trying to bring more people to the table and reach out to different groups. We don't think the 10 or 12 who usually show up are representative of what the public really thinks," he said. 

Get more information about this topic

Read previous Delaforum article: Transition committee hands Clark a detailed roadmap

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