More budget cuts are likely for several Montgomery County agencies in the next fiscal year, the county’s budget director says.
Budget Director Rich Madaleno said department heads have been asked to evaluate their budgets and determine which programs and services are underperforming and could be eliminated.
County Executive Marc Elrich is preparing his budget proposal for the 2020 fiscal year that starts July 1 and his recommendations will be reviewed by the County Council.
The council passed a mid-year savings plan last month to cover a $44 million revenue shortfall. The savings plan came at the request of Elrich as a measure to help the county maintain adequate financial reserves.
The county’s current operating budget tops $5.6 billion. A December county forecast predicted “modest” increases in revenues over the next two years, with some softness in income and property tax revenues, and Maryland’s comptroller predicted that a recession is soon likely.
“Following the savings plan, we had asked agencies, as part of their normal process, to review their budgets,” Madaleno said. “We said ‘what would you suggest for targeted reductions? What isn’t delivering the results you hoped for?’ So we asked them to say, ‘what would a 4 percent cut look like, or what would a 2 percent cut look like?’”
Madaleno gave a presentation to more than 60 residents Tuesday night about the county’s current financial situation.
Madaleno said the county is seeking to reduce the amount of debt it carries. Debt service, the amount the county must pay to credit agencies for bonds that finance construction and infrastructure projects, totaled $429 million in fiscal 2019. This has risen from $408.2 million in fiscal 2018 and $397.6 million in fiscal 2017.
“We’re trying to slow down the rate of growth in debt. We’re trying to move away from issuing debt for issuing capital project, because that has to be paid back over the last 20 years,” Madaleno said.
Madaleno added that the county must entirely finance its retiree health insurance and pension systems. Currently, he said 96 percent of liabilities are funded.
The county cannot cut funding for Montgomery County Public Schools or Montgomery College due to the state’s maintenance-of-effort law that mandates that the same or greater dollar amount per pupil be spent each year.
Asked what he thought would be on the chopping block, Madaleno said the county was “exploring a variety of options,” but that there would definitely be cuts.
“Something has to go in order to get the balance,” he said.
Ohene Gyapong, a spokesman for the county executive, said in an email that the request from department heads was not a directive to make cuts, but to “continue to ensure that we are being smart with our resources as we remain good stewards of taxpayer dollars.”
Dan Schere can be reached at Daniel.schere@moco360.media
