Subscribe
Community
As legislature ends, reductions in state funding for local jurisdictions not as severe as feared when session began
County budgets take hit, but not knockout blow
Friday, April 17, 2009
 Click here to enlarge this photo
|
E-Mail This Article
ANNAPOLIS — Heading into a 2009 General Assembly in which nothing was sacred, local governments were bracing for the worst.
Budget cuts seemed inevitable. Revenues continued to dip. Programs were put on the chopping block.
As the dust settles from the 90-day session, one thing is clear for counties: It could have been a lot worse.
"Some things come down the line that you don't like, but you've got to realize that with so much money going to local aid, you've got to shoulder some of the responsibility yourself," said St. Mary's County Commission President Francis Jack Russell (D). "Partnership goes a long way in most everything we deal with. You can't always go one way. You've got to help manage the system as a whole."
Local jurisdictions have fared well in recent years, so they had to be part of the solution this year when other levels of governments were also sacrificing, Del. John F. Wood Jr. (D-St. Mary's, Charles) said Thursday at the Charles County Chamber of Commerce legislative wrap-up.
| Click here to enlarge this photo
|
"It was a tough session," said Calvert County Commission President Wilson H. Parran (D). "The economic downturn affected the counties, as well as the state. Our major concern was how much balancing of the state's budget we would have to absorb in addition to the revenue shortfalls that we're experiencing as a result of the downturn."
Legislators gathered in Annapolis in January aware that the economy would dominate much of their work. County leaders, meanwhile, feared local jurisdictions would be the low-hanging fruit to help solve the state's fiscal woes at a time when their own budgets were strained.
"The counties are going to scream bloody murder, but they're the largest part of the state's budget," Senate President Thomas V. Mike Miller Jr. said prior to the opening of session. "When the sun shines, they do very well, but in down times, they've got to take the proportion of cuts just like everybody else in state government."
That would have meant gigantic cuts, as 40 percent of the state budget goes to local aid.
No single reduction was more heavily fought than shifting the cost of teacher pensions to the counties. Local leaders said it would force them to cut critical services or raise taxes to make up the revenue difference.
Even after Gov. Martin O'Malley's proposed budget did not include the teacher pension item, legislators introduced bills to keep it on the table.
"We had some real threats early in the session that would have really undermined our fiscal position," said Charles County Commissioner Gary V. Hodge.
The passage of the $787 billion federal stimulus package saved the day for counties. It muted talk of the teacher pension shift for this year and promised millions of dollars for Medicaid, education, transportation, energy assistance and more.
"Without the stimulus money, we would have had no alternative but to make draconian cuts … that would affect every dimension of our responsibilities at the state and local level," Hodge said.
Even so, counties weren't totally spared from the budget cleaver.
O'Malley (D) plucked $367 million from a little-known local income tax reserve fund within the Office of the Comptroller and required counties to replenish the account over a 10-year period, beginning in 2013.
Then, budget writers agreed to take $162 million from a fund counties use to pay for local road projects. County leaders asked legislators to remove more from the highway maintenance account, rather than seize $60 million in local income tax revenues known as the "piggyback tax."
Other cuts impacted county jail reimbursements, park revenues, community college aid and assistance for local libraries.
In total, the fiscal 2010 budget slashes aid to St. Mary's County by $3.6 million from last year. But the Maryland Association of Counties said that St. Mary's was shorted $4.9 million from what the county would have received based on funding formulas in place it before the legislature acted.
Charles County will see nearly a $4 million loss from last year's state aid, while Calvert will sustain only a $410,000 reduction, according to legislative budget data.
All in all, Miller (D-Calvert, Prince George's) said counties should be relieved that they didn't take a bigger hit.
In the coming weeks, counties will have their hands full adjusting local spending plans to account for the legislature's actions. All three Southern Maryland jurisdictions will tap reserve funds to mitigate the state cuts.
Russell said St. Mary's plans to use a portion of its $11 million fund balance to bridge the gap, while Parran said Calvert will also look at deferring non-essential projects in addition to help balance its books
Parran, who also serves as president of the Maryland Association of Counties, remains hopeful that the economy will rebound and this year's cuts are not made permanent.
In the meantime, counties should think long term and exercise fiscal restraint when crafting its budgets, Russell said. "We've got to operate as frugal as we can and try to maintain what services we can. … It's going to be challenging to say the least," he said.
House Minority Leader Anthony J. O'Donnell (R-Calvert, St. Mary's) said counties should look at ways to rein in their expenses and plan for tougher times ahead.
Sen. Roy Dyson (D-St. Mary's, Calvert, Charles) agreed. "The counties are going to have to live with reduced expectations," he said.
