Budget shortfall growing

As gap heads toward $10 million, Ulman suggests cuts, health workers are laid off

March 15, 2009|By Larry Carson | Larry Carson,larry.carson@baltsun.com

Based on new state revenue estimates, Howard County's budget shortfall is headed toward $10 million, twice what was predicted just one month ago and more than five times the estimate in October.

The county's health officer, Dr. Peter L. Beilinson, has laid off the first of up to 15 state health workers in response to the bleak revenue projections.

Still, County Executive Ken Ulman said there is money to cover the shortfall before the fiscal year ends June 30, and he is moving to limit county employees' eligibility for retiree health benefits as a way of trimming up to 15 percent from the county's costs.

Ulman divulged the news at a meeting of the Columbia Democratic Club on Wednesday night. With two County Council members, Jennifer Terrasa and Chairwoman Mary Kay Sigaty, among the 50 people at the Jeffers Hill Community Center, the county executive painted a dour picture.

"The budget is awful," Ulman said.

He had just received the news from county budget director Raymond S. Wacks, who had spoken to state officials.

"We thought it's going to be bad. It's worse," Wacks had told Ulman.

After reassuring the group that the county has enough put aside to cover the immediate shortfall, plus a $45 million rainy day fund, Ulman said: "We have really tough decisions to make, really tough choices.

"The general fund will be dramatically less," he said. "We're not talking even funding. We're talking actual cuts."

Ulman told the group that he's unsure whether the county can afford to continue giving the state money to help ensure commuter bus service to Columbia. Howard contributed $200,000 this fiscal year to help stave off elimination of commuter bus service between Baltimore and Columbia, and along the U.S. 1 corridor. State officials have said they might need county dollars to keep the service running after July 1.

"We do feel like we're left out of the regional transit system," Ulman said.

Summoning his characteristic optimism, Ulman noted that the county had received renewals of its AAA bond ratings from all three New York rating agencies last week. And even with about 5,000 more people unemployed over the past 18 months, Howard County's unemployment rate remains the lowest in Maryland.

Beilenson said he began laying off workers from his 180-member operation last week and that more will be let go by July 1. Several worked one or two days a week, he said, and two administer hearing and vision tests to children.

Five to 10 more workers will lose their jobs by July 1, he said, mostly because of the latest downturn in state revenues.

"Frankly, this is going way beyond cutting fat," Beilenson said, adding that more jobs would have been cut before July 1 if not for federal stimulus funding.

The county Health Department is a state agency, funded by the state.

Ulman said he has been working with county school officials to limit the cost of retiree health benefits for all county workers. Under federal accounting rules, those costs must be provided for, in cash, before employees retire. Until 2006, local governments paid retiree benefits as they occurred, as a part of each year's operating budget.

County officials have estimated the total debt to be about $477 million, but Ulman said the rules he will change could reduce that by up to 15 percent.

"They're not huge [changes]. They won't affect retirees," Ulman said.

Kevin Enright, the county's public information director, said the details haven't been worked out yet but that many current employees would not be affected by the new rules.

One change would require workers to have 15 years of seniority instead of 10 to qualify for retiree health benefits.

Wacks said retiring workers would be given an option to defer benefits. Currently, each employee must choose at the time of retirement whether to take the benefit. But Wacks said many police, firefighters and some teachers begin second careers that might offer health insurance. If so, they might not use the county benefits for years, reducing county costs and lowering the annual county contribution.

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