Montgomery County officials expect a $135.4 million budget gap next fiscal year -- assuming the county doesn't raise salaries for any employees across county government, public schools, Montgomery College or the Maryland-National Capital Park and Planning Commission, officials said Tuesday.
County employees have had no cost of living increases in three years and no step increases for two years, according to Council Staff Director Steve Farber. County government and Montgomery College employees had furloughs in fiscal 2011, while park and planning employees had furloughs in both fiscal 2011 and 2012.
A step increase across county employees would cost $31.4 million, said Farber, while every 1-percent COLA increase costs $23.6 million.
|The budget picture|
|Fiscal 2012 estimated||Fiscal 2012 actual||Fiscal 2013 estimated|
|Property tax||$1.44 billion||$1.46 billion||$1.49 billion|
|Income tax||$1.24 billion||$1.12 billion||$1.25 billion|
|Transfer/recordation tax||$130.8 million||$143.5 million,||$139.4 million|
|Investment income||$1.6 million||$1.6 million||$2.7 million|
|Other taxes||$313.9 million||$325.3 million||$206.7 million|
|Other revenue||$842.1 million||$842.2 million||$845.9 million|
|Total revenue||$3.97 billion||$3.89 billion||$3.94 billion|
|Available to allocate to agencies||$3.44 billion||$3.44 billion||$3.41 billion|
|Approved fiscal 2012 budget||Projected fiscal 2013 spending|
|Montgomery County Public Schools||$1.95 billion||$2.0 billion|
|Montgomery County Government||$1.22 billion||$1.22 billion|
|Montgomery College||$218.0 million||$220.0 million|
|Maryland-National Capital Park and Planning Commission||$96.9 million||$99.7 million|
|Source: Jennifer Hughes, director of the Montgomery County Office of Management and Budget|
The county is renegotiating union contracts, and the results of those negotiations could determine the future of employees' salaries.
Farber, with the directors of the county's Finance Department and Office of Management and Budget, presented an updated picture of the county's finances to the County Council on Tuesday.
In addition to no pay raises, the data assumes that the county's increased energy tax will revert to its fiscal 2010 level. In May 2010, the council approved a two-year increase to the tax -- 59.6 percent for businesses and 155.5 percent for residents. The increase is scheduled to expire in June, but extending it would bring in an additional $113.3 million.
The Finance Department estimates that in fiscal 2013, the average resident's bill would be $95 without the increase and $245 with it, while the average business's bill would be $2,730 without the increase and $4,388 with it.
Although County Executive Ike Leggett, who originally proposed the energy tax increase without an expiration date,has said that extending the increase would prevent further budget cuts, Management and Budget Director Jennifer Hughes said Tuesday that Leggett has not made a decision on the tax.
In light of threats by credit-rating agency Moody's to downgrade the county's 40-year AAA bond rating, the county also plans to nearly triple its contribution to the fund supporting retiree health care, contributing $146.6 million in fiscal 2013, up from $49.8 million this year.
Farber acknowledged that the increase would be difficult to stomach alongside cuts in other areas, like the 1- to 2-percent cuts every county agency has been asked to make.
"Even a 1- or 2-percent [cut], especially for some of the bigger agencies, is still a very difficult cut to make," Hughes said.