Montgomery County Executive Isiah Leggett today joined Ingrid M. Turner, Prince George’s County Council chair; Andrew Mackel, Wicomico County deputy director of Finance; and Michael Sanderson, executive director, MACo in briefing the House Ways and Means Committee on the fiscal challenges counties are facing. These challenges include drastic reductions in State aid since 2007, maintenance of effort requirements, revenue declines and budgetary pressures. In his remarks, Leggett expressed concern about the Governor’s budget, which could add even greater burdens to already strained counties.

Below are the themes that Leggett addressed:

• Local governments are concerned about the State’s $1.6 billion budget deficit and how this will affect local governments.

• It has been a tough couple of years for counties. They cannot handle additional cuts or increased obligations.

• Montgomery County is facing many fiscal challenges:

o State aid has been drastically reduced since FY 2007
o Teacher pension shifts are on the horizon
o Maintenance of Effort obligations have increased
o Cost shifts and/or reductions appear to be coming to the counties in the Governor’s budget
o County revenue declines continue, creating additional budgetary pressures

• The County has already had to accommodate significant cuts in State funding to help balance budget cuts – well over $400 million – already factored into the Governor’s budget. Now, with the fiscal year 2012 budgets, additional reductions have been added.

• State funding to the County has already been dialed back to levels not seen since the mid-1980s.

• Counties have used all the same tools the State has to get through this fiscal crisis – layoffs, furloughs, across-the-board cuts – and even some options that the State hasn’t used, like dipping into the Rainy Day Fund.

• Montgomery County has made very difficult decisions to balance its budget.

• Montgomery County has:

o Closed budgetary gaps exceeding $2.2 billion in the last four years
o Eliminated over 1,000 full time equivalent positions in the last two years
o Imposed a hiring freeze, effective since fiscal year 2008

In fiscal year 2011, we have:

o Imposed a wage freeze and furloughs
o Eliminated over 30 police officer positions and nearly 30 correctional officers
o Reduced Fire and Rescue staffing at certain stations
o Cut library materials by over 40 percent, reduced library hours, and eliminated over 75 librarian positions
o Cut bus routes
o Reduced recreation center hours and staffing
o Reduced: health care for the uninsured, affordable housing investments, senior services, and after school programs
o Imposed a procurement freeze
o Achieved a total County government reduction of 7 percent and overall a 4.5 percent reduction

To achieve even greater savings in the current fiscal year, we have:

o Reduced $32 million from the current year budget, including 20 layoffs
o Asked County government departments, including public safety, transit, health and human services, libraries, and recreation, to identify up to 15 percent in reductions – over $80 million in additional service cuts
For next fiscal year:
o Proposed significant reductions in employee health care, retirement, and pay through the collective bargaining/arbitration process

• The County’s Maintenance of Effort obligations have made balancing the budget even more difficult.

• Montgomery County is appreciative of the waiver granted by the State Board for fiscal year 2011, but the County is still not in the clear.

• Montgomery County continues to support Maintenance of Effort waiver reform to provide for a clearer and fairer process for evaluating County hardships in requests.