Council to vote on more budget cuts

Thursday, July 17, 2008

Council to vote on more budget cuts

School system to lose $14 million but has option to tap into reserves

by Daniel Valentine | Staff Writer

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The Prince George’s County Council is poised to cut the county budget by $45 million, with $14 million coming from the school system.

The county’s Public Safety and Fiscal Management Committee voted Monday to approve cuts needed to make up for a $45 million gap caused by the struggling real estate market. The council, which must approve the cuts, is scheduled to vote July 23 on the recommendation.

County officials said the school system’s current $20.5 million in reserves may be tapped to make up the difference, but Superintendent John E. Deasy expressed concern.

‘‘We may choose to cut to leave that fund balance,” said Deasy, pointing out how little would be left of the reserve fund. ‘‘... That makes me very uncomfortable.”

Deasy said having less than $10 million in reserves makes it difficult to respond to future budget emergencies.

School officials said earlier this year that they planned to use about $71 million from reserves in fiscal 2008 and fiscal 2009 to make up for funding shortfalls. The school system previously had about $100 million stored away for emergencies.

County officials plan to cut $20 million in unallocated funds from the $2.6 billion county budget and $11 million from government agencies, and grant and transfer payments.

County officials said they hope to restore some of the funding later by getting county employees to agree to smaller raises this year. County Executive Jack B. Johnson has sent letters over the past two weeks to unions representing public works employees, police and firefighters asking them to forgo their 3 percent cost-of-living increases for the year and renegotiate contracts.

However, officials for one union nixed the idea Monday.

‘‘We know of no reason why we must excuse the county from its responsibility to honor to the letter each of the labor contracts for [fiscal] ’09,” officials for the American Federation of County, Municipal and State Employees wrote in a letter Monday to the county. ‘‘It is the county’s obligation to pay its bills when and as they come due, just as we must pay ours for our households.”

Previous projections had placed the county shortfall at $48 million, caused by a drastic downturn in the county real estate market. Officials said they expect to get $3 million more from the county revenue authority and park and planning.

E-mail Daniel Valentine at dvalentine@gazette.net.