Thursday, March 25, 2010

How the Counties Spend Your Money, Part Four

Today, we examine total and per capita county spending in three categories: libraries, economic development and debt service.

Here is total and per capita spending on libraries by county.

Well-educated and liberal Montgomery County is not a leader on library spending. Its per capita library spending of $42.50 is little more than the state average of $40.48. The leaders are Harford County ($69.35) - which is run primarily by Republicans – and Howard County ($62.13).

Here is total and per capita spending on economic development by county.

Baltimore City is the runaway leader here, spending more than three times the state average in per capita terms. But this could very well be wasted money. The city’s real property tax rates are more than double any other Maryland jurisdiction’s, and as we will see, the city’s local contribution to its schools is the lowest in the state in per capita terms. Sky-high property taxes and under-financed schools are enormous hurdles to economic growth that cannot be offset by government spending on economic development programs. Montgomery County, the state’s economic engine, actually spends less than the state average on economic development per capita.

Here is total and per capita spending on debt service by county.

Unlike the federal government, county governments cannot rely on debt to finance their operating budgets. The counties issue general obligation bonds to pay for capital improvements and finance the interest payments out of their operating budgets. The size of debt service payments depend on the size of the counties’ capital programs and the percentage of capital spending paid by current revenues rather than borrowing. Montgomery County has been reducing the amounts of current revenues dedicated to capital spending, guaranteeing that debt service payments will rise in the future.

We’ll look at public schools and examine Montgomery County more closely tomorrow.