An Update from Councilman-Elect David Marks on the Baltimore County Budget
The freshmen County Councilmembers were recently briefed on Baltimore County’s budget situation, part of an orientation as we prepare to take office on December 6. Generally, Baltimore County has weathered the economic recession better than many jurisdictions, but there are some ominous signs on the horizon.
As I have said many times, Baltimore County is one of the best-managed jurisdictions in Maryland. Over the past 16 years, when the county was flush with revenue, it poured money into capital projects that generally did not add to long-term debt or operating expenses. The county also negotiated pension packages with key unions. As a result, the county has avoided the types of layoffs and furloughs we have seen in metropolitan jurisdictions across the United States.
At the end of the last fiscal year, on June 30th, the General Fund had a balance of $109 million, or 7 percent of the overall General Fund budget. Additionally, there was $84 million in the Revenue Stabilization Reserve Account, typically referred to as the Rainy Day account. Thus, the combined surplus balance and Rainy Day account totaled $193 million, or 12 percent of the FY 2011 General Fund budget.
There are, however, signals that the county will not be able to simply glide through the recession to better economic times.
The biggest concern is what will happen with teacher pensions. The state faces a $1.6 billion budget shortfall in FY 2012, and legislative leaders may try to shift the cost of teacher pensions to local governments. If a measure had passed during the 2010 legislative session, it would have cost Baltimore County up to $8 million the first year, and $40 million by the fourth year.
Another ominous sign is the decline in state aid for transportation projects. The state slashed Highway User Revenue from $36 million in FY 2009 to about $1 million in FY 2011. These cutbacks are starting to have a real effect. Congestion isn’t going away, and we may have another bad winter that leads to more potholes on our deteriorating roads.
Finally, the overall national economy affects Baltimore County’s budget situation. We are stuck in a very long and severe national recession that ultimately affects how Baltimore Countians spend their money and when they decide to buy a new home.
So Baltimore County faces a difficult balancing trick over the next few years. The county must continue to look for ways to cut spending, but at the same time, we need to appropriate more money for capital projects like road resurfacing where there has been some retrenchment by the state. Above all, we need to avoid tax increases that would hurt the recovery and set a bad message to businesses looking to relocate in Baltimore County.
I’m going to work with the new County Executive and the other Councilmembers to try to find that right balance that keeps the county moving forward.
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