MACo Executive Director Michael Sanderson, along with MACo President and Howard County Executive Ken Ulman, testified in support of HB72 with amendments on March 1 before the House Appropriations Committee. HB72, the Budget Reconciliation and Financing Act (BRFA), reconciles various provisions incorporated into the Administration’s FY 2012 fiscal plan, bringing the proposed budget into balance for the year. Its Senate crossfile, SB 87, was heard in the Senate Budget and Taxation Committee on March 2. MACo First Vice President and Prince George’s Council Member Ingrid Turner and MACo Executive Director Michael Sanderson offered testimony.
The largest effect on local governments in this year’s plan is the extension of more than $400 million in reductions to transportation, public safety, health departments, local correctional centers, and other local functions. When combined with the additional new cost shifts and reductions proposed in the FY 2012 budget, funding to local governments is being cut by over $500 million. In comparing funding levels since FY 2007, funding for State agencies, entitlements, and K-12 education are each up by over a billion dollars, while State funds supporting counties and municipalities have been reduced by $572 million.
To exacerbate the situation, Maryland is currently experiencing the largest decline ever in property assessments. Properties assessed this year declined by a statewide average of 22% after a statewide decline of almost 20% last year. We are likely to see property tax revenue shrink for many counties throughout the state who keep the same tax rate.
Counties have enacted many budget actions to accommodate these reductions and will clearly be compelled to do so in the upcoming fiscal years. Further reductions and cost shifts will increase county shortfalls forcing drastic reductions in “front line” services at a time when citizens need them most. MACo urged State policymakers to pursue other avenues besides county partners to solve the State’s budget problem. MACo offered comments in the following areas:
- Assessment Function Shift
- Pension Reform
- Flat Funding at the FY 2012 Level
- Income Tax Reserve Fund Repayment
- Transportation Trust Fund and Local Roadways
- Shift of Parole Costs
- Aging Schools Program