Leggett: Capital budget proposal controls debt -- Gazette.Net


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Montgomery County’s capital budget is a blueprint for what we will build, maintain and replace in the county over the next six years. This week, I forwarded to the Montgomery County Council my recommended Fiscal Year (FY) 2014 Capital Budget and proposed amendments to the FY 13-18 Capital Improvements Program (CIP). This CIP adheres to previously established bond guidelines as an essential part of my ongoing effort to bring our burgeoning debt service payments under control.

After years of constrained spending, many of our safety and infrastructure needs that have gone unmet are becoming more urgent. It’s tempting to try to redress our backlog of needs in one fell swoop as our economy continues to improve. But we are not out of the woods yet. We have been making hard choices for six years. We are not yet finished making hard choices.

The actions of the General Assembly that shifted teacher pension costs to the county imposed stricter Maintenance of Effort requirements that constrain our flexibility in funding many important priorities. Therefore we must resist the temptation to overspend, particularly on capital projects. Once debt service costs are incurred, they take precedence over all other county expenditures, seriously limiting our ability to fund other critical services. That is why we need to continue to control future debt — and the operating budget costs associated with new projects.

My CIP budget recommendations recognize this reality by delaying planned projects and focusing on funding critical safety-related capital needs or projects that will boost the county’s recovering economy and spur job growth.

Given the many other needs that must be met through our operating budget, I believe that it would be unwise to increase our long-term debt service costs beyond my recommended levels. This is why my continued partnership with the County Council to maintain an affordable level of long-term debt is crucial. Our cooperation and unity last year was essential to preserving the county’s AAA bond rating. I strongly urge the council to again maintain my recommended borrowing limits to bring our burgeoning debt service payments under control.

My recommended CIP amendments provide for critical infrastructure projects, such as unforeseen bridge projects, storm drain culvert replacements, replacement of unreliable Ride On buses and funding in FY13 to accelerate the installation of new security systems in all elementary schools.

However, to meet long-term goals of controlling debt, I am recommending some project deferrals and reductions shared across Montgomery County Government, Montgomery County Public Schools and Montgomery College. Even with these reductions, the budget sustains the quality of our local public education system, funding Montgomery County Public Schools construction and infrastructure projects at $1.34 billion and funding recently expanded Montgomery College initiatives with $356 million over the six-year period.

The necessary steps we have taken over the last six years to address structural budget gaps by resolving an unprecedented $2.6 billion in budget shortfalls have been difficult. But, we must stay the course. Despite the extraordinary challenges we continue to face, I remain very optimistic about the future of our county as long as we remain true to the prudent fiscal policies we have embarked upon over the past six years. Continuing on this path is essential to the health, welfare and overall quality of life of our residents and our county.

The writer is the Montgomery County executive.