Washington County faces a $7.4 million budget shortfall for the coming fiscal year, county Budget and Finance Director Debra S. Murray said Tuesday.
Murray presented the Washington County Commissioners with a proposal to make up the shortfall through a combination of departmental budget cuts, savings and denying part of an education budget increase request.
The plan would allow the county to balance its budget without any tax rate increases, Murray said.
The $7.4 million shortfall is a combination of about $5.9 million in requests for increased expenditures over this year’s budget and about $1.5 million in decreased revenue projections, she said.
Property tax revenue is expected to drop about $900,000, or about 0.75 percent, for the next fiscal year, according to a budget draft.
The main reason for the drop is that properties in the city of Hagerstown, the county’s largest tax base, were reassessed in January, and many of those values dropped since their last assessment three years ago, Murray said.
Property tax is the county’s largest general fund revenue source, accounting for $124.9 million of the proposed $196.6 million general fund budget.
That proposed budget is 0.26 percent smaller than this year’s general fund budget of about $197.1 million.
Funding increases requested by departments and agencies included a $3 million hike in education-related expenses, a $1.5 million increase for fire and rescue services, a roughly $750,000 increase in health insurance costs and a roughly $840,000 increase in debt-service costs.
The $3 million education increase included requests from Washington County Free Library, Hagerstown Community College and the Washington County Board of Education, which asked for $1.75 million in extra funding for school buses, Murray said.
Murray recommended denying about $2.8 million of the requested $3 million in education funding increases, but did not specify which requests would be denied.
“We’ll go over that in detail next week,” she said.
Even departments that requested flat funding would be asked to do some belt-tightening as they absorb a total of about $1.6 million in departmental and agency operating budget reductions, Murray said.
The county would also use about $1.2 million of cash savings and about $1.2 million in capital savings toward closing the budget gap, she said.
The county budget will go to a public hearing, typically held in May, before being put to a vote by the commissioners. Fiscal 2012 begins on July 1.