County's budget work limps to finish

Leftover funds used to fill holes

Friday, May 22, 2009

The county budget is due to be formally adopted next Tuesday. The total stands at about $201 million, which is $1.4 million less than the current operating budget.

The board of education gets $79.9 million of the county budget, an increase from $76 million in the current year for recurring costs. The total operating budget for the schools come to $181.5 million, with the balance coming from state and federal revenue as well as school surplus funds. That total is about $1 million more than last year.

The commissioners decided Tuesday to use $1.2 million from this year's budget stabilization fund and debt service savings to make up for $2 million as revenues are coming in lower than expected. New projections came up $3.8 million short from the real estate recordation tax, interest income from investments and in the local share of the state gas tax. Property taxes are now expected to be $1.8 million higher than originally budgeted, which helped offset the loss.

Because the commissioners and staff reduced the number of building projects over the next six years, St. Mary's County will borrow $30 million on the bond market in 2010, instead of $35 million. Earlier this month, the plan was calling for $45 million in projects.

One of the projects pushed out was a trash transfer station. Operating it costs more than the money collected from a $60 residential fee added to property tax bills each year, and the commissioners considered a similar commercial fee earlier this year, but dropped it.

Trash operations will still require $447,960 from the general fund.

The county's operating budget still has $461,751 left unallocated, but the commissioners left it untouched because income tax revenues are falling.

"It seems pretty safe to say that we won't make budget" for income tax revenue, said Elaine Kramer, chief financial officer for county government.

Income tax distributions come down from the state in bursts throughout the year and the county share could be down anywhere between $576,809 and $1.3 million. The county won't know for sure until the fall. "Income tax was where we would expect the most volatility," said County Administrator John Savich, because taxpayers can file for extensions and change withholdings.

The 2010 budget has a $1.7 million budget stabilization fund that may be used to offset income tax deficits, along with the $461,751. Commissioner Larry Jarboe (R) called the budget stabilization fund "leftover tax dollars."

But, Kramer said, "It's actually an expenditure in the appropriation line."

The county is already using $3 million this year in fund balance to offset reduction in funds coming from the state.

The plan is to use $3 million in fund balance for the next two years as well to replace revenues that previously came from the state.

County government will be funding merit and step increases for employees, but is not offering a cost of living allowance. There are only six new employees in the budget, and they are corrections officers for the sheriff's office.

Commission President Francis Jack Russell (D) said Wednesday, "The state cut us some money and we had to find ways to make it up. We were lucky we were resourceful, that we had some fund balance to apply to bridge this gap. It's just good management, that's all. You can't operate in a vacuum and in a shoestring all the time. You've got to stick a little of that money away."

jbabcock@somdnews.com

Building budget highlights in 2010

- $4.5 million for Leonardtown Middle School renovation

- $900,000 to begin work for a new Leonardtown library

- $650,000 to continue FDR Boulevard in California

- $1.3 million in federal stimulus funds for Mechanicsville Road bridge replacement

- $728,600 for Dr. Johnson Road bridge work

- $525,000 for new athletic fields at 5th District Park

- $1.9 million for Greenview Knolls Elementary School heating and ventilation system renovation

Tax rates remain the same

- Property tax rate: 85.7 cents per $100 of assessed value

- Income tax rate: 3 percent of taxable income

- Recordation tax: $4 for each $500 of value of sold property

- Local transfer tax: 1 percent of property transfer value

- Amusement tax: 2 percent of receipts

- Trailer park tax: 10 percent of space rental receipts

- Local 911 fee: 75 cents a month

- Hotel/motel tax: 5 percent of charge

- Energy tax: 1.25 percent of bill

- Cable tax: 5 percent of subscriber revenue

Source: St. Mary's County government