SNOW HILL — With a $17 million gap between revenue and expenditures in the requested Fiscal Year 2013 operating budget, the Worcester County Commissioners will be forced to choose between cutting programs or raising taxes. Unfortunately, some on the commission believe that because of costs being hoisted on counties from the state this year, a tax increase may be a forgone conclusion.
“There’s no way you’re going to cut your way out of this,” said Commissioner Virgil Shockley this week.
Commission President Bud Church held a similar view of the situation.
“I think it’s inevitable,” he said of a property tax increase this year.
The total requested budget comes in at $171,933,575, up $8,392,431 or 5 percent from the current year, while county revenue only covers $154,886,084, down $8,655,060, also 5 percent.
The drop in revenue is due mainly to falling property tax revenue, which dipped by $11,056,943. This is the result of assessments conducted this year that re-valued property. When property values fall, the amount of property taxes collected by the county also decreases.
The increase in expenditures comes from two major sources. First, the Board of Education is asking for $74,312,543, up $1,825,380. This represents level funding from last year as well as a small pay raise for school employees. Because county employees, whether they work for the schools or not, have traditionally received raises at the same time, the Fiscal Year 2013 budget includes a 3-percent salary increase for all county workers, at a cost of $660,667.
An even bigger burden on the budget is being passed down from the state level, though, and is the main reason several commissioners anticipate a property tax increase being proposed and passed eventually.
Approximately $2,471,915 in new general government costs are filtering down from Annapolis to Worcester. These include $367,049 for responsibility for the State Department of Assessment, as well as an estimated $2,222,298 that the county will need to set aside to cover the traditionally state-paid teacher pension fund.
Chief Administrative Officer Gerald Mason noted that the figure could shrink, however, if state legislatures decided to phase the pension responsibility shift out over a certain amount of years.
“This may be adjusted downward after the General Assembly is done working the counties over,” Mason said.
Shockley was even more critical of Annapolis.
“There’s no trust in the Transportation Trust Fund,” he said.
“Quite frankly, there’s damn little trust at all.”
According to Shockley, the state has become more and more dismissive of not only Worcester, but the entire Eastern Shore over the years. “We used to get the crumbs that fell off the table. Now they use a vacuum cleaner before they sweep the table off,” he said.
Shockley went so far as to question if the benefits received from the state outweighed the newest wave of regulations and expectations.
“There are nine counties on the Eastern Shore asking the same question: why do we want to be a part of the state of Maryland?” he said.
The series of unfunded mandates from Annapolis has effectively “nickel and dimed” Worcester in Shockley’s opinion. He now sees no choice but a tax increase.
“It’s going to go up,” he predicted. “It’s just a matter of how much it’s going to go up.”
Church also took several shots at Annapolis legislatures, who he called “dysfunctional.” As for the largest rock the state is poised to drop on counties, teacher pensions, Church couldn’t understand how such a move could be justified and whether or not it will take place in full or only in part.
“That’s the big question right now,” he said. “The teacher pensions should not be our expense.”
With the state unable to afford to fund the pensions, shifting them to the even less fiscally stable counties was, in Church’s opinion, not “the fair and equitable thing to do.”
According to Mason, raising the property tax rate by a penny would bring in about $1.6 million in new money. To achieve constant yield, rates would have to jump by 7 cents.
“All that does is give you money equal to what you had this year,” Mason explained to the commission.
Even if the commissioners were to raise taxes to the point of constant yield, there would still be more than an $8 million gap left to contend with, staff reports.
Shockley said he expects a combination of cuts and a tax increase before the budget is eventually evened out.
“I don’t even know where to begin on [employee] raises or anything,” he said.
According to Shockley, matters will be clearer once Annapolis has made a final decision on what percentage of the teacher pension bill counties will be forced to foot. The most he was willing to commit to were previously stated priorities, mainly guaranteeing adequate funding for public safety like fire and police.
“There are certain things I will not compromise on,” he said.
Shockley confirmed that most of his colleagues would likely approach the table with their own pet projects. While he reiterated that he won’t budge when it comes to keeping public safety at the top of his list, he acknowledged that he is only one vote out of seven, and that only four votes are needed to pass a budget. While Shockley said that it would be nice to see the commission vote unanimously this year, he doesn’t expect such a clean resolution.
But he did point out that, no matter how unpleasant the process, a budget will eventually be drafted.
“Whether you like it or not, you have a budget to do,” Shockley said.
Church agreed and stressed that Worcester “is still in the early stages” of developing this year’s budget. Until Annapolis has made final decisions on how much of their burden they will transition to the counties, Church said that everything from tax increases to program cuts will have to be considered.
“All of that’s still on the table,” he said.
The county will attempt to smooth out the budget during an all-day work session on March 27. The budget will be finalized later this spring and must be sent to the state by the end of May.