Scott L. Peterson, Director of Communications, Office of Public Information, 202-277-9412
ELLICOTT CITY, MD – Howard County Executive Ball today released the Spending Affordability Advisory Committee Report for the fiscal year (FY) 2020. In December 2018, Ball renewed the committee through Executive Order, giving them several objectives and a deadline of March 1, 2019. The committee was charged with reviewing the status and projections of revenues and expenditures for the County, not only for fiscal year 2020, but also for fiscal years 2021-2025. They also considered the impact of economic indicators and evaluated the best way to pay for the long-term obligations facing the county. The full report can be found here.
The committee pointed out a significant and growing gap between revenues, which continue to experience moderate growth that could be further stressed by an economic recession, and expenditure requests, which escalated to a new high. In FY 2020, the gap in the General Fund operating budget is projected to reach -$108 million before corrective action, partly due to a record-shattering HCPSS request to increase funding by $89.3 million. The committee also found requests for $232 million in FY 2020 capital needs, which is 2.5 times annual approved General Obligation bonds. They determined that without any significant changes, Howard County will struggle to meet many of the requests. Despite these challenges, the Committee sees an opportunity for the County to develop a comprehensive and sustainable long-term plan with stakeholders.
“I want to thank the members of the Spending and Affordability Advisory Committee for volunteering their time and talents for the benefit of the Howard County government and taxpayers,” said Ball. “This report provides a fiscal roadmap for our county to make smart and sustainable investment decisions moving forward. It is clear that uncertain economic times are ahead, and we must continue to be strong stewards of our residents’ tax dollars.”
“Without changes to revenues or expenditures, current patterns of spending are unsustainable in the long-term,” said the committee report. “We believe that a significant challenge for policy makers will be to balance pending fiscal restraints against historical levels of service, so that the needs of the population are met.”
Among the many fiscal challenges facing the county, the report highlighted:
- Support of our outstanding public education system
- Continued capital investments for roads, schools and other infrastructure such as upgrades to (or replacement of) the county’s correctional facility
- Funding for safe communities
Paying our long-term obligations (pension, retiree health benefits, and debt service payments)
The committee recommends development of the FY 2020 budget based on projected revenue of $1.15 billion, an increase of 2.7% ($30 million) over FY 2019 budget. They also recommend limiting authorized new General Obligation bonds in FY 2020 to $70 million.
The report notes that “although Howard County should average 2 to 3 percent revenue growth over the next few years, the current expenditure requests are considerably outpacing that growth… Our elected officials have had to make and must continue to make tough decisions as it relates to the priorities for funding in our County.”
They also listed anticipated reductions in federal and state expenditures due to recent tax cuts, as well as a possible economic slowdown, as influential factors.
The committee made several recommendations to County Executive, including to:
- Tackle revenue options, including examine taxes and fees that are not comparable with other jurisdictions.
- Prioritize and balance service needs and implement innovative solutions.
- Address structural deficit in Fire Fund through tax increase and ambulance fee to support critical fire and EMS services.
- Prioritize capital needs and bring them more in line with fiscal reality.
Despite challenges, the committee sees “an important opportunity for all responsible parties to come together and develop a comprehensive and proactive plan for revenue, expenditure, and capital investment over the next decade to help lead our County into a sustainable and successful future.”
One thing to keep in mind is that this report reflects recommendations from the committee to the County Executive…and I would expect to see some of the recommendation reflected in the County Executive’s budget this year. Here is a part of the executive summary to know about:
“Without changes to revenues or expenditures, current patterns of spending are unsustainable in the long-term. We believe that a significant challenge for policy makers will be to balance pending fiscal constraints against historical levels of service, so that the needs of the population are met. It is important for community and government leaders to understand the fiscal impact of national, state, and local policies, and their effects on revenue sources, economic growth, and the spending and investment decisions of County residents and businesses. All of which determine the County’s ability to plan and invest in its future.”
As well as:
“Despite all the challenges, the Committee believes the County is being presented with an invaluable opportunity for all responsible parties to come together and develop a comprehensive and proactive plan for revenue, expenditure, and capital investment over the next decade to help lead our County into a sustainable and successful future.”
There is way to much information to break down in one blog post…so look for additional posts in the future on specific sections of the report.