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County to get $9 million less from state in 2009

December 10, 2007|By JOSHUA BOWMAN

WASHINGTON COUNTY ? While recent spending cuts passed by the Maryland General Assembly fixed some of the state's budget issues, they have left local governments like Washington County with new fiscal pressures to address.

An analysis by the Maryland Department of Legislative Services shows that Washington County will receive about $9 million less than expected from the state in fiscal year 2009 as a result of cuts passed by the General Assembly.

Income tax revenues in Washington County are projected to drop by about $1.8 million, while state education aid could be about $6.3 million less than expected.

Other projected reductions for fiscal year 2009, which begins in July, include an estimated $326,000 drop in Program Open Space money, a $319,000 reduction in expected highway user revenues and the elimination of a $357,100 electricity deregulation grant.

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The General Assembly's cuts came during last month's special session, which was convened to address the state's $1.5 billion budget shortfall. Legislators trimmed $550 million from the projected fiscal year 2009 budget in part by cutting $248 million in state funding to Maryland's 23 counties and Baltimore City.

Washington County Budget and Finance Director Debra S. Murray said the county has prepared for the cuts.

"We have known about the (state's) structural deficit for years and anticipated that some of it would get passed to the counties," Murray said.

Several county officials noted that only the income tax cut will reduce revenue from fiscal year 2008, while the rest of the cuts are reductions in projected increases.

Washington County Commissioner James F. Kercheval said the reductions "could have been worse" but noted that more are expected during the General Assembly's regular session, which begins next month.

"We are cautiously optimistic at this point," Kercheval said.

Murray said the $6.3 million reduction in education aid increases will affect Washington County Public Schools as well as Hagerstown Community College. She said the county received a $15.4 million increase in education aid in fiscal year 2008, or a total of $110.3 million.

The $1.8 million reduction in income tax revenue is anticipated because the General Assembly raised the personal exemption from $2,400 to $3,200. The county collected $66,488,879 in income tax in fiscal year 2007, which ended last June.

Several county officials said they were especially concerned about the drop in highway user revenues, which are generated through taxes on fuel, vehicle titles and license plates.

The county receives about $9 million per year in highway user revenues, which completely fund the county's highway department.

Public Works Director Joseph Kroboth III said state budgetary changes cost the county $8 million in highway user revenues from 2003 to 2005.

"The state has seen highway user revenues as an easy target to secure limited funds in the past," Kroboth said.

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