Tuesday, February 23, 2010

MoCo Budget Ugliness Never Ends

Have you ever encountered a cockroach that was almost as big as your foot? And upon stomping on the creature, the roach looked up at you and said, “Is that all you got?” This is how the County Council must feel about the budget. The County Executive’s office presented FY 2011 budget options to the County Council this morning, and crawling from the documents were some of the meanest, toughest and most revolting critters ever seen in Rockville.

The Executive’s fifteen page presentation contains some of the same sobering long-term numbers that cast an evil pall over Chief Administrative Officer Tim Firestine’s recent presentation to the Montgomery Delegation. Nothing has altered the Executive’s forecast of $500-700 million deficits stretching through FY 2016 and perhaps beyond. What is new is the massive deterioration of county finances in the coming fiscal year (2011), which begins on July 1. The Executive will soon be making his budget proposal and the council must decide which governmental limbs are to be chopped off by mid-May.

And there could be MANY limbs flying off the butcher’s table. Four items have swelled the FY 2011 budget gap:

Reduction in non-school state aid: $32 million
Reduction in fees, fines, permit and speed camera revenues: $42 million
Snow removal costs: $25 million
February revenue writedown: $55 million

The old deficit was a miserable $608 million. The new deficit will be an unimaginably apocalyptic $762 million. That’s about one-sixth of the county’s budget, folks.

So what can be done? The Executive has not formulated his proposal yet, but he has put some options on the table, including continuance of his $70 million mid-year savings plan, $42 million of capital budget cuts, deferral of retiree health paydowns, cancellation of any general wage adjustments and $100 million in further cuts to the non-schools part of the government. All of that cuts the deficit by more than half to a still-hefty $315 million.

But the Executive’s presentation causes us to read between the lines. In multiple budget options, the Executive exempts the schools because of the state’s Maintenance of Effort (MOE) requirement. The county ran afoul of MOE last year and was slapped with a $23 million fine. What the Executive is saying is that even with an extreme set of measures, the state’s MOE requirement still saddles the county with a gigantic budget deficit. The General Assembly is now considering a variety of bills that would make MOE waivers easier to get or even provide for an automatic statewide waiver next year. Both MCEA and the PTAs oppose any weakening of MOE. And so all of this could lead to an ugly battle in Annapolis as well as Rockville.

Even the cockroaches would avert their beady eyes from that!