HAGERSTOWN — Four members of the Washington County Board of Commissioners explained Tuesday why they support borrowing $14 million for capital projects in the next fiscal year, while commissioners President Terry Baker argued for lower borrowing.
The five-member commissioners’ budget discussions also included a preview of the general operating budget for next fiscal year, which is proposed at about $194.6 million, a slight decrease from this year’s budget, as county revenue continue to decline.
On the capital side, Baker said he wanted to borrow no more than $10 million — approximately the amount of debt the county paid off last year.
The proposed $44.9 million capital budget would require $14 million in tax-supported borrowing, an amount recommended based on several debt affordability benchmarks, Budget and Finance Director Debra S. Murray has said.
Reducing borrowing to $10 million would mean cutting $4 million worth of projects from the budget, Murray said.
“That’s what I have to do in my everyday household,” Baker said. “Things that I want, I have to put off because of the economic climate.”
Commissioner William B. McKinley said he could not find $4 million worth of projects he was willing to cut.
“I’m trying hard to look at this list, and the things I can look at that I would consider maybe not funding or putting off are not substantial enough to make a dent in the $14 million,” he said. “They’re $60,000 here, $80,000 there.”
Commissioner John F. Barr agreed.
“As a businessman, I look at this list of essential needs in this community, that aren’t going to go away, and are only going to go up in price tag if we put it off,” he said.
Baker did not name the projects he would cut or delay, saying the commissioners should ask the division and department heads who make up the Capital Improvement Plan Committee to recommend the necessary cuts.
Commissioner Ruth Anne Callaham said the committee had already given its recommendation, and if the commissioners wanted to make cuts, “they have to be done here at this table.”
“I don’t know how I can say, ‘Reduce it,’ if I can’t say where it should go,” McKinley agreed.
Callaham argued that borrowing now, while interest rates are low, is better than delaying projects until the economy improves, when interest rates will be higher.
“When you have a depressed economy, that’s the time to maximize your borrowing,” she said.
Rates for county bonds are 3.2 percent now, compared to 4 to 5 percent before the recession, Murray said.
Commissioner Jeffrey A. Cline said he agreed with McKinley, Barr and Callaham.
As for the operating budget, Murray told the commissioners that revenues are declining, but not as sharply as in previous years.
A general fund budget draft shows property tax, the county’s main revenue source, decreasing about $3.3 million, or 2.6 percent from this fiscal year to the next. Although no property tax increase is proposed, the decrease is due to a smaller tax base.
Meanwhile, budget officials are projecting an increase in income-tax revenue of about $2.5 million, or 4.1 percent, for the next fiscal year, based on a prediction of 3 percent wage and salary growth, according to the budget draft.
Overall, the proposed general fund budget of about $194.6 million is about $1.7 million, or 0.85 percent, lower than the current year’s $196.3 million budget.
A public hearing on the county budget is tentatively scheduled for May 8 at Hagerstown Community College’s Kepler Theater.
The new fiscal year begins July 1.