Due to unanticipated drops in income tax revenue, Harford County’s Fiscal Year 2009 budget will be millions of dollars short, a deficit County Executive David Craig hopes to make up by asking all departments to hold back on spending.
During Tuesday night’s Harford County Council meeting, Craig announced all government departments were tasked with identifying plans to hold back 5% of their current (FY 09) operating budget. The goal is to establish a reserve of $6.8 million in anticipation of the as yet unidentified shortfall in the current fiscal year. The following county agencies were also asked to participate in the hold back: Board of Education , State’s Attorney, Circuit Court, County Council, Health Department, Sheriff’s Office, Harford Community College, Libraries and Elections. Craig noted that participation will vary among these agencies, but indicated that in all, up to $16 million could be saved.
Craig said there would be no layoffs at this point, however a Personnel Action Oversight Committee has been established to review and evaluate all personnel actions, an Expenditure Oversight Committee will review all purchases.
Craig also said school projects in construction or already bonded will proceed. He referred to them as the “top 10,” saying he believed the modernization of Youth’s Benefit and projects below it on the priority list would likely be delayed.
The county executive also said the use of county-owned vehicles will be reduced and restricted.
Looking ahead, the cost to maintain operations in next year’s (FY10) budget totals $27 million. If the State decides to pass on the cost of pensions for teachers, library employees and community college staff, this will add another $28 million, for a total potential cost increase of $55 million for FY10.
Also Tuesday night, in a case of awkward timing, County Councilman Dion Guthrie did not introduce a repeal of the impact fee, despite having announced his intention to create an “economic stimulus” by removing the fee on new home construction.
Instead, Guthrie offered a bill which would amend the current legislation to exempt residential reconstruction from the impact fee when a permit is requested within 15 years of demolition. Tenant housing would be covered under the exemption if the residence was habitable for at least 5 years. Guthrie offered no public explanation for his change of plans or for the specific nature of the amendments contained in the bill.
Can you’ believe this? there getting ready to trim the fat. off of a system that has been growing rapidly. Now if they can just get it to work.
Here’s the official press release:
(Bel Air, MD – October 7, 2008) – – Harford County Executive David R. Craig, accompanied by County Treasurer John Scotten and Lorraine Costello, Director of Administration briefed the Harford County Council Tuesday night regarding the potential budget shortfalls the county faces this fiscal year and next. Specifically, county revenues are down in both income tax and property taxes.
“Historically significant budget reductions have been necessary as a result of downturns in the national economy or as the result of fiscal measures passed by the State legislature such as in 1992 and 2004,” stated County Executive Craig. “However, citizens of Harford County should be assured that their government is being proactive in maintaining the County’s strong financial status,” Craig remarked.
According to the Department of Treasury, income tax is projected to be down dramatically from FY 08. Current estimates indicate revenue may be down by more than $10 million. Additionally, due to projected FY 2010 funding needs, such as the opening of Bel Air High School in September of 2009, opening of the addition to Joppatowne High School, operational costs for newly installed air conditioning at Wakefield Elementary School; additional operating costs for the new Churchville Library as well as the expanded Whiteford Library, increase health benefit costs, actuarial pension requirements and other operating expenses, will mean expenses of approximately $27 million the county must meet.
Furthermore, should the State of Maryland shift part of their financial dilemma to local governments, Harford County could be faced with assuming pension costs for teachers, library employees, as well as the faculty and staff of Harford Community College, which totals nearly $28 million.
Subsequently, these increases coupled with slower growth in revenues than previously projected, could result in county government reducing services or modifying delivery of services to meet the requirements of a balanced budget.
The FY 08 budget was built on the expectation of 4.4% growth in income tax revenue, or a total of $170.3 million. However, the final income tax distribution recorded for FY 08 over FY 07 was $1,215,338 or 0.7% growth, for a total of $164.3 million. The FY 09 projected income tax revenue was based upon the FY 08 projected tax receipts, which subsequently fell far short of expectations.
As a result of the projected deficit in revenues, each Harford County governmental operation has been tasked with identifying plans to hold back spending of 5% of their current FY 09 budget allocation. Additionally, the county executive has asked the independent allied agencies and departments to also cut spending by at least 5%. Those agencies or departments requested to take such action include the Board of Education, Harford Community College, the Harford County Sheriff’s Office, the State’s Attorney, the Circuit Court, the Health Department, Harford County Libraries and the Board of Elections.
Additionally, a Personnel Action Oversight Committee has been established by County Executive Craig to review and evaluate all personnel actions and specifically requests to fill vacancies. Also, an Expenditure Oversight Committee has been created to review all purchases. Finally, the use of county-owned vehicles will be reduced and restricted in the near future.
“In our continuing effort to improve government efficiency and economy of operation, we will implement these and other measures to maintain a balanced budget for the remainder of this fiscal year,” County Executive Craig stated. “Working together with the Harford County Council I am confident we will take the necessary actions to keep government open and serving our citizens as best we can,” Craig remarked.
During his presentation to the County Council, County Executive Craig emphasized no county employees will lose their jobs due to the proposed plan of action to maintain a balanced budget.