Before the Montgomery County Council heads on recess for the remainder of 2012, it received an updated financial picture for fiscal 2014 from county staff.
Council President Nancy Navarro called the picture fragilely optimistic.
County Finance Department forecasts show revenue up about $30.9 million for fiscal 2013, but down about $8.8 million for fiscal 2014. Fiscal 2014 begins July 1, 2013.
Lower inflation is expected to decrease property tax revenue in 2014, contributing to less revenue in the coming fiscal year.
Council Staff Director Stephen Farber said the projected budget gap for 2014 is about $136 million. It is created by increased costs of major known commitments.
On Tuesday, staff noted that gap does not include any agency pay increases except the second of two raises given by MCPS to some of its employees, scheduled for May 2013.
Staff noted that a 1 percent cost of living adjustment for all agencies would cost $23.6 million. A step increase for all agencies would cost $31.4 million.
Farber also reiterated that the budgets after 2014 are expected to be tight.
“We’ve got to be very careful about commitments made in fiscal , because those will have implications for the out years, and our current fiscal projections show a very tight situation then as well,” Farber noted.
Projections continued to indicate that if the council only funds Montgomery County Public Schools and Montgomery College at the state-required minimum for the coming fiscal year, it will leave county government and the Maryland-National Capital Park and Planning Commission about 5 percent short.
Changes in Maryland’s maintenence of effort law — which requires funding education at the same amount per student as the year before — have “handcuffed” the county, Councilman Philip M. Andrews said.
Andrews (D-Dist. 3) of Gaithersburg said the county cannot consider providing more money than the state required amount to meet maintenance of effort unless the state changes the law.
Under changes approved earlier this year, the state can take county income tax revenue and direct it to education should the county school funding falls below mandated minimums. Although counties can apply for waivers, those are at the discretion of the state Board of Education, a body some on the Montgomery County Council argue is not impartial on the issue.