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Leggett Closes $779 Million Budget Gap with Largest Spending Reduction Since 1968

Hard Choices Made Include Reductions in Programs, No Pay Increases, Furloughs, $3 Monthly Hike in Energy Tax

Montgomery County Executive Isiah Leggett today announced his recommended $4.3 billion operating budget that closes a $779 million gap for fiscal year (FY) 2011 that begins July 1. Although the budget focuses on protecting essential services and Leggett’s priorities of education, public safety and the safety net for the most vulnerable, it reflects some “hard choices” made by the Executive, including reductions in programs, no pay increases and furloughs for County employees, and a $3 monthly hike in the County energy tax.

 “Past cost reduction efforts have focused on preserving my priorities of public safety, education and the safety net for the most vulnerable,” said Leggett. “Although I reduced the budget by $1.2 billion over the last three years, the size of this year’s budget deficit leaves no alternative now but to include more reductions in County services across all programs.”

 In the four budgets Leggett has prepared, he has closed budget gaps of nearly $2 billion to address shortfalls every year – which is unprecedented. The magnitude of the problem is reflected in the County’s income tax revenue annual rate of growth. In FY07, income tax revenue increased by 21 percent. In FY10, it decreased by more than 15 percent. 

This budget brings the County government’s tax-supported growth rate down from a 14.1 percent increase in FY07, the year before Leggett took office, to an historic minus 6.1 percent in the FY11 Recommended Budget compared with the current year. The overall 3.8 percent decrease for all County agencies from all sources represents the only reduction in the annual County budget in modern County history -- since the adoption of the current charter in 1968.

The budget proposes cutting costs by:

  • Eliminating 452 government positions, 232 of them currently filled,
  • Providing no pay increases of any kind for County government workers,
  • Furloughing non-public safety County employees for 10-days,
  • Realizing cost savings from all County departments, and
  • Reducing current revenue funded expenditures in the capital budget.

Among County government departments, the largest reductions from FY10 levels are in the Regional Service Centers and the Office of Human Resources (both 33 percent reductions), the Commission for Women (27 percent), the County Executive’s Office (26 percent), Housing and Community Affairs (24 percent), Transportation (23 percent), and Libraries (22 percent). Among the lowest reductions were Fire and Rescue (2.6 percent less than in FY10), Police (4 percent), Correction and Rehabilitation (4.5 percent), Department of Transportation/Transit Services (6.8 percent), and Health and Human Services (10.6 percent).

Faced with tough choices for public safety, this budget averts more serious reductions in first response Fire and Rescue Emergency Medical Services (EMS), because it includes instituting an Emergency Medical Services Transport Fee that will provide an estimated $62.2 million over the next four years.

The EMS Fee will be billed directly to an individual’s health insurance, Medicaid, or Medicare. Because County residents already pay taxes to support EMS service, no County resident will pay a dime, or even receive a bill. No County resident who is unable to pay will have any out-of-pocket expense for transport to the hospital. Leggett explained that “Nearly all our surrounding jurisdictions have a similar fee and are using those resources to improve service and save lives – with no adverse effects. Montgomery County should do the same instead of leaving tens of millions of dollars in insurance reimbursements uncollected.”

The facts about the EMS Transport Fee are available at: www.montgomerycountymd.gov/emstransportfee.

As a last resort to avoid further reductions in County services or additional layoffs, Leggett also recommended an increase in the County’s energy tax to raise an additional  $50 million. The tax is paid by all utility users, including federal facilities in the County that pay no other major County taxes. For the average homeowner, this means an increase of about $3 a month.

For more information on the Executive’s recommended budget, click to view the news release, budget highlights and the full budget.

Montgomery County Income Tax Revenue Annual Rate of Growth Budget Shortfalls Closed County Government Rate of Growth County Government Rate of Growth

 

CATEGORIES: Budget
POSTED AT: Monday, March 15, 2010 | 4:21:00 PM |
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Last edited: 11/8/2010