County, state rocked with bad budget news again

Investment income drop forces more cuts

Friday, March 12, 2010

There are just months to go before the 2011 budget adoption but the Charles County leaders and their number crunchers Tuesday had to pull an already tight belt a little tighter to respond to a drop in expected revenue from county investments.

A fall in interest rates affected some of the returns on county investments officials described as "conservative."

This week the county received news that its year-over-year state income tax payment had risen by 1.6 percent; or $329,000. Prince George's County was the only other county to see an increase, though Fiscal and Administrative Services Director Deborah Hudson said it had to increase its tax rate to see that raise.

"It's positive news. It could definitely be worse," Hudson said. "But there's been a sharp and dramatic decline in revenue, and it appears it's going to be a straight line for some time. That's without the state having further impacts to the county."

While Hudson said she did not want to minimize the encouraging news of being one of only two jurisdictions in Maryland to see a rise in tax revenue, that bump up "does not offset the estimated year-end shortfall in income tax."

On March 9, the commissioners approved filling a roughly $3 million fiscal 2010 budget gap with the help of $2.8 million in department cuts and an additional $700,000 transfer from the Cable TV fund.

"By law we have to balance the budget; we have to do something to balance it for the remaining quarter of this year," said county commissioners' President F. Wayne Cooper (D). "It's absorbing cuts within the county government without affecting any other agencies ... We're trying to handle this within house."

Among the approved department cuts was the removal of $774,000 from the contingency fund; $466,000 from the public facilities department and $700,000 in salary savings.

"We have several budget analysts who went through every line item in the budget and did a trend analysis to predict what each department would need to get through the rest of this year on a pretty bare-bones budget," Hudson said. "We have transferred $774,000 out of a contingency fund that we established when we adopted the [fiscal 2010] budget. We did leave $50,000 in a contingency if an individual ran into an emergency or had some unforeseen circumstances."

Hudson said the $700,000 that has been captured from salary savings is a result of the 21-month hiring freeze and a handful of vacant positions.

Roughly $200,000 was saved by reallocating several positions to enterprise funds including the environmental service fund.

Communication equipment repairs, medical expenses and phone costs were cut within the emergency services department, though Hudson and Cooper were quick to point out that the services were not getting cut; $135,000 in carryover money was being used to fill the budget gap.

If any money is left of what the departments have to spend for the remaining months it will be rolled into the fund balance, Hudson said.

The commissioners' office has sliced $4,400 from its safety consultant line item; $100,000 has been saved by adjusting electricity needs at the new Waldorf sheriff's office building and the economic development department has cut $80,000 of its remaining fiscal 2010 budget.

Hudson told the commissioners that the community services department's budget and the department of planning and growth management are mostly covered by grants, and the $122,000 in agency cuts is actually internal county government cuts.

Commissioner Gary V. Hodge (D) asked about the $10,000 cut to road repairs and maintenance and what it would mean for dealing with the damage caused by the recent severe weather.

"We have an adjusted budget of $294,000 in that particular line item. To date we've used $133,000 and we have a remaining balance in that account after this cut of $150,000," Hudson said. "We think that is enough to cover the expected road repairs based on our winter storms."

The $700,000 budget transfer out of the cable fund will still leave money to pay for operating the television station and proposed additions at the College of Southern Maryland and at the new Waldorf library.