Cutting Off the Counties?

One way to attack the state budget deficit is cut aid to the counties. Naturally, county leaders are less than thrilled with this idea and Gov. Martin O'Malley has expressed opposition to balancing the state budget on the backs of the county governments. However, the General Assembly seems open to the idea in theory though we'll see how they feel about it when they see the impact on their county.

Sen. Madaleno's office provided me with a table showing me how cuts totaling $652 million would fall on the counties. Montgomery would take the biggest hit by far, losing $155 million in state funding and $80 million more than the runner up (Baltimore County). At 24%, the reduction would be the largest hit in percentage terms as well. Worcester County, home to Ocean City, would take the second largest cut at 20%. On a per resident basis, the proposed spending cuts would be the second largest in the state. Montgomery would lose $166 per resident while Calvert would lose $180 per resident.

Despite their size, one can make a case that the cuts would actually hit Montgomery less hard than other jurisdictions. Montgomery would have to raise property taxes by 8 cents to recover the lost funds--as low as any jurisdiction in the state save Queen Anne's. In contrast, Allegany's property taxes would have to jump by 26 cents. Prince George's would have to raise their taxes by 11 cents to recoup the loss from the state and TRIM limits their ability to raise property taxes, so Prince George's would have to make major cuts in the county budget.

However, the question remains how this would impact residents in absolute terms. After all, Montgomery's taxes would go up less because its property is worth more. An 8 cent increase on valuable property may result in a lot more tax than a much larger increase on a property valued much less. Montgomery's legislators would want to see the numbers on how much of tax hike their constituents could expect before rushing to embrace county cuts.

Additionally, some aspects of cuts could be expected to grow further in the future. Teacher retirement costs in Montgomery is expensive because we pay our teachers well compared to many other jurisdictions. It is hugely to our advantage that the State picks up the tab. If we start splitting the cost with the State, the County will be taking on a long-term burden which will rise in the future unless we cut teacher benefits--not a desirable goal in a county with a strong educational system which wishes to continue to keep and to attract excellent teachers.