As governments begin crafting their fiscal 2015 budgets, a number of factors still have to fall into place.
While the financial outlooks for Montgomery County and Maryland have improved somewhat from earlier projections, uncertainty in the county’s budget stems from several variables, including the federal government’s decisions on the budget debt ceiling and a possible Supreme Court decision on a Maryland case involving payment of county income taxes.
County Executive Isiah Leggett (D) will meet in January with residents at five forums around the county to get feedback for his proposed budget, which he’ll submit to the County Council in March.
The council will hold a series of public budget hearings in April and must pass a budget by the end of May.
In July, the county faced a $300 million deficit between projected revenues and expenditures.
The county currently has a projected deficit of about $166 million, but is looking at ways to close the gap without significant cuts to programs by cutting costs and increasing revenues, said Jennifer Hughes, director of the county’s Office of Management and Budget.
Among the money-saving measures the county is exploring is a provision in the federal Affordable Care Act that would let the county get reimbursed for its retired employees’ prescription drug costs.
A Dec. 3 memorandum from Hughes cited “the need for continued restraint in the County’s spending plans” as the fiscal 2015 budget is developed, despite the modest economic recovery.
Montgomery also is awaiting the disposition of a Maryland tax case that could be headed to the U.S. Supreme Court. That case concerns whether counties must be required to provide a credit for county income taxes on out-of-state income taxes paid to other states on certain types of corporate income.
The Maryland Court of Appeals ruled that failure to provide a credit is unconstitutional, and the Supreme Court hasn’t decided whether to accept the case, according to county documents.
The county’s fiscal plan would require all county agencies to take a 0.9 percent spending cut to produce a balanced budget in fiscal 2015.
But because of the county’s obligations to provide “maintenance of effort” funding to its public schools and Montgomery College, funding for the county government and the Maryland-National Capital Park and Planning Commission would have to be reduced by 2.4 percent to balance the budget.
Maryland’s maintenance of effort law requires counties to not cut per-pupil spending in any budget. Part of the budget puzzle is how much money jurisdictions will get from the state.
Gov. Martin O’Malley (D) will release his proposed budget in January and the General Assembly is scheduled to approve a budget by the end of March.
Meanwhile, county municipalities are starting work on their own budgets.
Municipalities don’t get a lot of information from the state about how much money will be available until sometime in February, said Suzanne Ludlow, assistant city attorney for Takoma Park.
The city also is engaged in ongoing discussions with the county about reimbursements for payments made by residents to the county that the city already provides, such as police protection, she said.
Takoma Park will likely try to fund two initiatives that were started last year, City Manager Brian Kenner said.
One is an ordinance passed in July to prohibit residential use of certain types of pesticides for lawn care.
The city started exploring in fiscal 2014 how the ordinance would be enforced, but didn’t dedicate any funds to it, Kenner said. In the coming fiscal year, it will likely add staff and resources to help develop the program.
The city also is likely to explore how to implement the findings of a report conducted on how it can limit greenhouse emissions, he said.
Poolesville is facing what is likely its toughest budget in the past five to seven years, said Jim Brown, president of the town’s board of commissioners.
The town has many fixed costs, such as its wastewater treatment plant, well system and employee salaries, Brown said. Town employees could receive a small pay increase in fiscal 2015.
After accounting for fixed costs and infrastructure projects such as repaving streets, the budget gets tight, Brown said.
“There’s really not a lot to play with,” he said.
Gaithersburg is “guardedly optimistic” about getting some increased revenues and possibly adding a few staff positions, although revenue figures from the city’s various departments haven’t been collected yet, said City Manager Tony Tomasello.
Some new staff will likely be added in the public works department, among other possible areas.
The city added about 10 positions last year, Tomasello said. Gaithersburg had 278 full-time employees included in its fiscal 2014 budget.
Employees received cost-of-living and merit pay increases last year, and Tomasello said the city would consider it again this year but the decision is up to the city council.
A 2 percent raise for Rockville employees is part of the city’s initial budget proposal, but it’s still very early in the process, said Mayor Bridget Donnell Newton.
The city didn’t cut staff during the Great Recession, but some vacancies went unfilled, she said. The city is looking at the possibility of making a representative to the Historic District Commission a full-time job rather than have it handled as one of the duties of current staff, Newton said.
The position conducts research to determine historic designations and other information, she said.