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Hagerstown budget deficit solutions discussed

January 13, 1999|By DAN KULIN /Staff Writer

Increasing trash collection fees, eliminating vacant jobs and taking money from the its reserve account are among the options being discussed by Hagerstown officials as they look for ways to offset a projected $1.1 million budget deficit.

Raising taxes was not on the list of budget options presented to Hagerstown City Council on Tuesday by Finance Director Al Martin. Martin told council members, however, that every penny increase in the tax rate would add about $70,000 to city tax revenues.

The current tax rate is $1.74 for every $100 of assessed property value. Last year the council raised the tax rate 4 cents.

Facing an estimated $1.1 million general fund budget deficit in the next budget year, which begins July 1, city department heads are looking to the City Council for guidance.

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City Administrator Bruce Zimmerman said that because tight financial projections call for tough budget decisions, it would be easier to get council members involved in developing the budget early on.

On Tuesday, Martin presented the council with a list of possible ways to increase revenues and cut costs to balance the city's $20.5 million general fund budget.

Councilmen J. Wallace McClure and William M. Breichner seemed to favor taking money from the $3.8 million reserve account, which is the city's savings account.

Martin said he was concerned about dipping into the city's reserves to fund a budget because the money might not always be there.

Increasing the trash collection fee was not a popular option among council members.

Breichner said he wanted to look into possible savings that might be realized by cutting the trash collection schedule from twice a week to once a week.

No decisions were made Tuesday. Council members scheduled a special session to discuss how to balance the budget. The special session was tentatively scheduled for Jan. 28 at 6 p.m. at a meeting room at the Hagerstown Ice & Sports Complex. The meeting is expected to be open to the public.

Under the City Charter, the city administrator is required to provide the council with a balanced budget by March 31.

The budget deficit is projected for the fiscal year that begins July 1 and ends June 30, 2000.

Martin said original estimates showed the deficit could be as high as $1.7 million. By "shuffling" debt payments and adjusting some revenue estimates, the projected deficit dropped to about $1.1 million.

Martin said the deficit projection is the result of property tax revenues not keeping pace with increases in city spending.

Martin said the city incurred a deficit of about $200,000 during the last budget year, which ended June 30, 1998. He said the city budget is expected to balance during the current fiscal year.

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