County Executive Robert R. Neall yesterday ordered all government departments to cut spending by 1.6 percent to offset an expected $10 million budget shortfall.
The county expects to lose that much from a combination of shrinking income tax revenue and cuts in state aid, Neall said. "There isn't any countervailing good news to offset the bad," he said.
However, citizens should not worry about losing police protectionor school supplies for their children -- at least not yet.
"This is an attempt to avoid that situation," said Neall, who wants cost-containment plans from each department by Sept. 3. "Direct services to citizens are going to be the last thing that's affected."
Neall explained his plan to the County Council last night. He would not dismiss the possibility of layoffs, but said, "If we put together a good $10 million plan, we may not have to."
Anne Arundel's current fiscal problems, as well as those of all other Maryland counties and Baltimore city, are rooted in the state government's precarious financial situation. State budget analysts are projecting a shortfall of $300 million for the current fiscal year, which ends June 30.
Aid to local jurisdictions takes up nearly 60 percent of the total state budget. About $150 million of Anne Arundel's current $616.6 million budget is supposed to come from state government.
In fiscal 1991, when state legislators had to cut the budget by $676 million, regional governments suffered relatively little, losing only $55 million. In Anne Arundel, the loss amounted to only $1.5 million.
But Steve Welkos, acting county budget officer, said it's doubtful the county will escape that easily this year. "The state is getting to the point where local governments cannot be held harmless any more," he said.
And while revenue from income, recordation and real estate transfer taxes is not dropping as drastically as it did a year ago, neither is it rebounding, Welkos said. Income tax revenue, expected to provide $140 million in fiscal 1992, is growing at a rate of about 1 percent, compared with 8 to 11 percent in previous years.
"That's basically no growth," Welkos said. "We're hoping that the growth will be a little higher in 1992. If it isn't more than 1 percent, the projected $10 million shortfall will be much higher."
Yesterday's request for budgetcuts came as no surprise. In July, Neall reinstituted a hiring freeze and told departments cost-containment measures were a must.
Although all departments have been asked to submit cost-cutting plans, the cuts will vary from department to department, he said.
The Boardof Education, which accounts for the lion's share of local spending,with a $341.4 million budget, has not been exempted from the cuts. Slicing 1.6 percent from its budget would amount to about $5.5 million.
"It's about what I expected," said Jack White, the school system's budget officer. White said he's been working on a plan to cut $5 million through delayed hirings, hiring freezes and a reduction in spending for maintenance and supplies.
The school system continues tofill vacant teaching and non-teaching positions, he said.
Becausemore than 80 percent of the school board's budget is spent on salaries, "it'll be real hard to absorb any kind of cut without affecting instructional programs," especially if energy costs go up, White said.He added, "We're already cut to the bone."
Officials will not know the exact reduction in state aid until after the General Assembly convenes in January.
"If we've estimated too large, we'll be that much to the good, and if we've not estimated large enough, we'll have to go back," Neall said.