Wednesday, March 25, 2009

Doing The Math

Boy is it ugly out there! Everyone is having budget issues and your county is no different.

To meet the needs of our approximately 965,000 residents, our county budget is about $4.2 billion. That comes out to about $4,350 per resident. It's getting hard to maintain the current level of services we're providing because a sagging economy means we're having problems generating as much revenue as we originally anticipated. Why, you may ask? Didn't the county know this would be a tough year?

Actually, we did know -- but until we actually see some of the revenues come in, we don’t really know exactly how big a problem we’re facing. Interestingly, most of our revenue sources are okay; the real problem is in the income tax.

In Montgomery County, a lot of our income tax revenue comes from people paying capital gains taxes, which is usually generated from investment income. Obviously, there aren’t many people making investments right now -- so our current calculations show we’re already off about $590 million from what we were originally anticipating.

We're running low on funding, and we've already agreed to not increase taxes during this difficult fiscal time. So, what do we do?

Well, our schools are getting some funds from the federal stimulus package. That'll help a bit. Additionly, the County Council will have to work with our employee organizations (unions) to re-negotiate the current contracts to eliminate cost of living allowances (COLAs), just as the school system had already done with its employee organizations. That'll save us about $125 million.

After that, we'll have to re-focus our county’s efforts, clarify our priorities and make reductions –- not necessarily fun, but necessary. Fortunately, our residents have already helped us by responding to a county-wide survey that was conducted last year. In that survey, you told as that your three most important areas of focus for the county are public safety, education, and a basic safety net of social services. Given this feedback, in my mind we have a good place to start.

Finally, in year’s past, it has been assumed by many organizations and individuals that once the County Executive’s budget proposal is submitted to the County Council, it provides a stone-carved blueprint, and that there will be few big changes in what is ultimately approved. That's not the case.

This year, the County Executive has made many assumptions in his budget proposal that may still require us to make additional reductions to close the deficit. So, everyone should be aware that we have a long way to go -- and we'd also love to have any feedback that you would like to provide during this process.

The budget public hearings are on April 14, 15 and 16 -- and if you want to sign up to testify, call 240-777-7931, or feel free to e-mail any thoughts that you may have.

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