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Leggett Warns of Budget Shortfall at Germantown Forum

January 10, 2015

 

By Kevin O’Rourke

 

 

Montgomery County Executive Isiah Leggett cautioned against expecting any increase in funding for line items in the fiscal year 2016 operating budget in a meeting with community members on Monday, Jan. 5, due to an expected $237.9 million shortfall.

   Leggett fielded questions and requests from upcounty residents on topics such as improving the transportation systems, expanding low-income housing, and increasing social services for senior citizens.

   However, increasing funding for any budget area will be difficult based on the budget projection presented by Rose Glavinic, of the Montgomery County Office of Management and Budget.

   Glavinic said that when the county begins fiscal year 2016 on July 1, it will be faced with a $237.9 million budget gap between the projected revenues and expenses. The largest portion of the overage expenses comes from $209.5 million for reserves and retiree health insurance, the rest is made up of $26.8 million for cash for the Capital Budget and $25.3 million for debt service.

   When asked if he would increase spending for senior services, Leggett said that increasing spending in any one area would be difficult with the challenges the County is facing.

   “I want people to understand that I am more cautious in terms of making an increase to a budget,” said Leggett. “I look at the budget and say it would be wonderful, under the condition that we are in, if I can maintain the current status. If we can maintain essential public services were we are right now. Meaning that the likelihood of an increase becomes secondary to maintaining the levels we have.”

   He expressed concerns over the amount of state aid the county could count on in light of the change of parties and power in the Governor’s mansion. “The reason for that is,” Leggett told the crowd of about 75 people at Black Rock Center for the Arts in Germantown, “I don’t know what the governor’s budget will look like and I don’t know what revenues are out there.”

   “I am not going to commit to increasing anything so long as we have a new governor’s budget and a general assembly that has not acted on a new governor’s budget, we have a change in the projection of revenues and a deficit at the state level, and we have the Wynne Case, plus our own projected deficit as well.”

   The Wynne Case, currently before the Supreme Court, has Howard County couple, Brian and Karen Wynne challenging the rights of local governments to tax income from out-of-state jurisdictions which have already taxed the income.

   “We have made an adjustment of our income tax receipt because of the so-called Wynne Case,” said Legget.”It is a case that challenges local jurisdictions throughout the state of Maryland in their ability not to make certain refunds or out-of-state taxes that corporations at the local level.”

   Leggett told the audience, that if the Supreme Court decides against the State of Maryland, it would mean that Montgomery County would be liable for over $100 million retroactively in back claims. “It would also mean that going forward it will impact us for about $25 to $30 million each year,” he said adding that Montgomery County would probably the most effected county in the Maryland.

   “Part of that $200 million is based on a reduction in the projection of income tax assuming a loss in that case. If we prevail in that case, that amount of money will be readjusted and the deficit will be a little bit smaller,” he said.

   Leggett will host four more budget forums. The additional forums in other areas of the county are scheduled for Wednesday, Jan. 14 at the Silver Spring Regional Services Center in Silver Spring; Tuesday, Jan. 20 at Eastern Montgomery Regional Services Center in Silver Spring; Thursday, Jan. 22 at the Mid-County Community Recreation Center in Silver Spring; and Monday, Jan. 26, at the Bethesda-Chevy Chase Regional Services Center in Bethesda.

   Leggett will submit his Recommended Fiscal Year 2016 Operating Budget to the County Council on March 16. The County Council approves the operating budget at the end of May. 

 

Photos by Germantown Pulse

 

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