Making do with less

County faces $116 million deficit

Anne Arundel County

March 15, 2009|By Tyeesha Dixon | Tyeesha Dixon,tyeesha.dixon@baltsun.com

The county is facing a $116.5 million budget shortfall for next year, and officials may have to consider layoffs and tapping into the $46 million "rainy day" fund for the first time.

Budget Officer John Hammond presented some of Anne Arundel County's budget issues at Tuesday's County Council work session, where members also reviewed a county financial audit and asked questions of administration officials about a bill recently introduced to allow slots in the county.

In fiscal 2009, the county saw a $43.2 million revenue shortfall, Hammond told the council. The "revenue stabilization," or "rainy day" fund, has $46 million in it, he said.

"We're going to do everything we can to avoid layoffs," Hammond said.

Another option the county is considering is not giving unionized county employees previously negotiated pay raises. That, and the thought of layoffs, gives Councilman G. James Benoit, of Crownsville, "a lot of heartburn."

"I think we're certainly going to have to make some tough choices this year," Benoit said. Hammond said a lot of the county's actions will depend on the state budget.

"We're putting together a list of actions we could take to deal with the shortfall in revenue and potential state actions, and once we have a firm hold on the revenue picture, that will determine what we will have to do on the expenditure side," he said.

Hammond called the shortfall number "a moving target."

"The likelihood of the state imposing additional cuts on local government is probably greater than it was yesterday," Hammond said Wednesday.

"The recently announced revenue figures from the state only aggravate a difficult situation," County Executive John R. Leopold said.

While the county budgeted for $83 million in recordation and collection taxes, that number is down $28 million, Leopold said, making it the most significant decrease in revenue. The state is also anticipating a decrease in income tax receipts.

"I hope to do all I can to forestall layoffs or furloughs," Leopold said, adding that he will start departmental meetings this week to talk about the budget.

"All the departments are going to share the sacrifice. ... We'll just have to take it one day at a time," he said. "I'm looking under every seat cushion for savings."

Leopold must submit his budget proposal by May 1.

The council also heard a presentation from County Auditor Teresa Sutherland about an independent audit of the county's financial statements.

While the audit found only one "significant deficiency" regarding preparation of the schedule of federal grants, Sutherland said, it also found that at least five applicants for nonresidential permits were charged too much for impact fees.

The audit recommends that a second person review the impact fees' calculation and data entry. Currently, one employee calculates the amount of fees due and enters it into the permit system.

The county's response to the recommendation says that the Office of Planning and Zoning has implemented a new system for "assessments to be checked by senior staff prior to conveying that information" to the Department of Inspections and Permits.

"It should be noted that new layers involving a review of every permit letter will slow down the process to some degree and add yet another task to an already overburdened staff," the response reads.

Benoit said that, overall, the audit did not concern him.

"Frankly, it shows that Teresa Sutherland is doing a standout job on behalf of the county in spotting weaknesses in the budgetary functions of the executive branch and calling on the County Executive to correct them," he said.

There was one exception: Benoit expressed concern that the county did not audit sales taxes because the county hiring freeze did not allow the auditor's office to hire a new employee to conduct them.

"What I call 'muscular' functions of government ... are being set aside such that we're not able to do critical enforcement," he said.

In addition to reviewing the budget and audit, the council questioned county officials about a bill introduced at a recent meeting to legalize slots in the county.

"I think the biggest piece that came out of the work session would be the Cordish presentation at the public hearing," said Councilman Daryl Jones, of Severn. "Everything else was pretty much a known factor."

Jones said he intends to request that a representative from The Cordish Cos., the developing company that put in a bid to build a slots casino at Arundel Mills, speak at an April 2 special hearing, at which the council will field public testimony about the slots bill.

"I think it's important for as many of the members of the public as possible to see what is being proposed in their community," said Jones, who represents the district that includes Arundel Mills.

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