Friday, May 23, 2008

Montgomery OKs $4.3 billion budget

Berliner says that the decision is nothing to celebrate

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This story was corrected on May 23, 2008, from its print version.

The Montgomery County Council unanimously approved a $4.3 billion operating budget Thursday that uses tax and fee increases along with service cutbacks and consolidated positions to close a projected $297 million deficit.

The budget raises spending by 4.3 percent, the lowest increase since 1997.

The council also approved a $4.2 billion six-year construction budget.

The council needed at least seven votes to pass the budget because it exceeds the county’s charter limit on property tax increases.

‘‘It was not an easy task this year as often it’s not in difficult economic times,” said Council President Michael J. Knapp (D-Dist. 2) of Germantown. ‘‘This year’s budget strikes a balance between fiscal prudence and providing the core services needed by [residents].”

Councilman Roger Berliner (D-Dist. 1) of Potomac said the budget was nothing to celebrate.

‘‘A seven-vote budget requires a lot of compromise,” Berliner said. ‘‘This is not my ideal budget.”

Councilwoman Valerie Ervin (D-Dist. 5) of Silver Spring said council members compromised on employee pay and other issues. Ervin successfully opposed a plan by two councilmembers to eliminate a 2 percent reduction in the scheduled cost-of-living raise.

But Ervin said the county will face tough choices next year.

‘‘We know next year’s budget is going to be more difficult and employees are going to have to face some of their own tough decisions,” Ervin said. ‘‘It’s going to come back around. And it’s going to require employees to look at having their contracts renegotiated. They know it. I wasn’t willing to go after those cuts this year when it wasn’t necessary. It may be necessary next year.”

The fiscal 2009 budget begins July 1. The county’s budget increases spending by 4.3 percent from fiscal 2008, the lowest level since 1997. The council’s budget comes in $9 million more than the budget recommended by County Executive Isiah Leggett (D).

To pay for the increases and to close the gap, the council levied an energy tax increase, estimated to generate $11 million a year and cost ratepayers $10 more a year on heating and cooling bills.

The budget also exceeds the county’s charter limit on property tax revenues by $118 million, but keeps the property tax rate at the current level of 90 cents per $100 of assessed value. A reduced property tax credit for homeowners will mean an increase over last year’s tax bill for many county homeowners.

Leggett had proposed increasing the tax rate by 7.5 cents and exceed the charter limit by an extra $20 million. Council members deviated from his proposal, saying increased burden on commercial property owners could be passed on to renters.

Staff Writer Janel Davis contributed to this report.